1
Exhibit 10(t)
LOAN AGREEMENT
Between
MICHIGAN STRATEGIC FUND
(the "Issuer")
and
AUTOCAM CORPORATION
(the "Obligor")
Relating to the Issuance of
$9,000,000
Michigan Strategic Fund
Variable Rate Demand
Limited Obligation Revenue Bonds, Series 1997
(Autocam Corporation Project)
Dated as of December 1, 1997
The interest (subject to certain specified exclusions)
of the Issuer in this Loan Agreement has been
assigned to Norwest Bank Wisconsin, N.A., in
its capacity as Trustee (the "Trustee") under
a Trust Indenture dated as of December 1,
1997, between the Issuer and the Trustee.
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TABLE OF CONTENTS
PAGE
DEFINITIONS.....................................................................................................-1-
PREMISES........................................................................................................-3-
ARTICLE I REPRESENTATIONS......................................................................-4-
Section 1.1 Obligor Representations and Covenants Regarding the
Internal Revenue Code................................................................-4-
Section 1.2 Additional Covenants.................................................................-8-
Section 1.3 Issuer Findings and Representations..................................................-9-
Section 1.4 Additional Bonds.....................................................................-9-
ARTICLE II THE BONDS AND THE PROCEEDS THEREOF...................................................-9-
Section 2.1 The Bonds............................................................................-9-
Section 2.2 Issuer Action on Redemption.........................................................-10-
Section 2.3 Investment of Bond Fund and Project Fund;
Non-Arbitrage Covenant..............................................................-10-
Section 2.4 Credit Facility.....................................................................-10-
Section 2.5 Tender..............................................................................-11-
Section 2.6 Remarketing Agent...................................................................-11-
Section 2.7 Right to Exercise Conversion Option.................................................-11-
Section 2.8 Rebate Account......................................................................-11-
ARTICLE III THE LOAN AND LOAN REPAYMENTS........................................................-12-
Section 3.1 The Loan............................................................................-12-
Section 3.2 Loan Repayments; Credit Facility....................................................-12-
ARTICLE IV THE PROJECT.........................................................................-13-
Section 4.1 Project Fund Disbursements..........................................................-13-
Section 4.2 Obligation of the Obligor to Complete the Project...................................-14-
Section 4.3 Completion Certificate..............................................................-14-
Section 4.4 Use of Surplus Bond Proceeds........................................................-14-
ARTICLE V OTHER PECUNIARY OBLIGATIONS OF THE OBLIGOR..........................................-15-
Section 5.1 Taxes and Other Costs...............................................................-15-
Section 5.2 Issuer Fees and Expenses............................................................-15-
Section 5.3 Fees and Expenses of the Trustee and Remarketing Agent..............................-15-
Section 5.4 Indemnification of the Issuer.......................................................-15-
Section 5.5 Indemnification of the Trustee......................................................-17-
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PAGE
Section 5.6 Insurance...........................................................................-17-
ARTICLE VI PROJECT MAINTENANCE.................................................................-17-
Section 6.1 Maintenance and Operation; Removal from Site........................................-17-
Section 6.2 Remodeling and Modifications........................................................-17-
ARTICLE VII DAMAGE TO PROJECT AND CONDEMNATION..................................................-17-
ARTICLE VIII ACTIONS AFFECTING OBLIGOR AND ISSUER
INTERESTS IN THE AGREEMENT AND THE PROJECT..........................................-18-
Section 8.1 Assignment of the Agreement.........................................................-18-
Section 8.2 Obligor's Interest in the Agreement.................................................-18-
Section 8.3 Liens by the Obligor................................................................-19-
Section 8.4 Security Interest in the Project Fund...............................................-19-
ARTICLE IX FURTHER OBLIGATIONS OF THE OBLIGOR..................................................-19-
Section 9.1 Compliance with Laws................................................................-19-
Section 9.2 Maintenance of Assets; Ownership of Project.........................................-19-
Section 9.3 General Limitations with Respect to Non-Impairment
of Tax-Exempt Status of the Bonds...................................................-20-
Section 9.4 Access to Project and Records.......................................................-20-
Section 9.5 Requirements of Tenants.............................................................-20-
ARTICLE X EVENTS OF DEFAULT AND REMEDIES......................................................-21-
Section 10.1 Events of Default...................................................................-21-
Section 10.2 Remedies upon Event of Default......................................................-22-
Section 10.3 Payment of Attorneys' Fees and Other Expenses.......................................-23-
Section 10.4 Waivers and Limitation on Waivers...................................................-23-
ARTICLE XI OBLIGATIONS OF OBLIGOR UNCONDITIONAL................................................-23-
Section 11.1 Obligor Obligations.................................................................-23-
ARTICLE XII MISCELLANEOUS.......................................................................-24-
Section 12.1 Amounts Remaining in Funds..........................................................-24-
Section 12.2 Obligor Bound by Indenture..........................................................-24-
Section 12.3 Consents Under the Agreement........................................................-24-
Section 12.4 Notices.............................................................................-24-
Section 12.5 Amendment...........................................................................-25-
Section 12.6 Binding Effect......................................................................-25-
Section 12.7 Severability........................................................................-25-
Section 12.8 Execution in Counterparts...........................................................-25-
Section 12.9 Captions and Table of Contents......................................................-25-
Section 12.10 Applicable Law......................................................................-25-
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PAGE
EXHIBIT A PROJECT DESCRIPTION..................................................................A-1
EXHIBIT B REQUISITION CERTIFICATE..............................................................B-1
EXHIBIT C COMPLETION CERTIFICATE...............................................................C-1
EXHIBIT D NO ACT OF BANKRUPTCY CERTIFICATE.....................................................D-1
EXHIBIT E PRIOR ISSUE CERTIFICATE..............................................................E-1
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LOAN AGREEMENT
THIS LOAN AGREEMENT (the "Agreement") is made and entered into as of
December 1, 1997 by and between the Michigan Strategic Fund (the "Issuer") and
Autocam Corporation, a Michigan corporation (the "Obligor").
DEFINITIONS
Except as provided herein, all capitalized terms shall have the
meanings ascribed to them in the Indenture (defined below). In addition to the
words and terms elsewhere defined in the Agreement, each of the following words
and terms as used in the Agreement shall have the following meaning unless the
context or use indicates another or different meaning or intent and shall refer
to all or part of the defined subject.
"Additional Bonds" means the Additional Bonds which are authorized to
be issued in accordance with Section 112 of the Indenture in one or more series
from time to time to provide funds for the purposes contemplated by the
Agreement.
"Completion Certificate" means the certificate provided for in Section
4.3 hereof, in the form of Exhibit C hereto.
"Completion Date" means the date of completion of the Project as such
date shall be certified in the Completion Certificate.
"Engineer" means any licensed professional architect/engineer or
architectural/engineering firm (who may be in the employ of the Obligor or
chosen by the Obligor).
"Event of Default" means those events of default specified and defined
in Section 10.1.
"General Limitations" means those general limitations on Obligor action
or failure to act specified in Section 9.3 hereof, sometimes referenced as a
condition to a particular Obligor action but applicable to any action by the
Obligor under the Agreement.
"Improvements to the Project" means such additions, improvements,
modifications or relocations as the Obligor may deem necessary or desirable in,
on or to the Project, all of which shall be included in the Plans and shall
become part of the Project.
"Indemnified Persons" means the Issuer and its members, officers,
agents and employees.
"Indenture" means the Trust Indenture between the Issuer and the
Trustee, dated as of December 1, 1997, as the same may be amended or
supplemented in accordance with its terms.
"Inducement Date" means November 19, 1997, on which date a resolution
of intent or inducement to assist in the financing of the Project was adopted by
the Issuer.
"Issuance Costs" means items of expense payable or reimbursable
directly or indirectly by the Issuer and related to the authorization, sale and
issuance of the Bonds and authorization and execution of the Agreement, which
items of expense shall include, but not be limited to, the Issuer's Issuance
Fee, application fees and expenses, publication costs, printing costs, costs of
reproducing documents, filing and recording fees, Bond Counsel and Counsel fees,
initial Trustee's fees, placement agents' fees, costs of credit ratings, Credit
Facility issuance fees and charges for execution, transportation and safekeeping
of the Bonds and related documents, and other costs, charges and fees in
connection with the foregoing.
"Issuance Fee" means the Bond issuance fee payable to the Issuer on or
before the Effective Date in the amount of one-quarter of one percent (0.25%) of
the principal amount of the Bonds (i.e., $22,500).
"Municipality" means the City of ▇▇▇▇▇▇▇▇, County of ▇▇▇▇▇▇▇, Michigan.
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"Non-Arbitrage Certificate" means the Non-Arbitrage Certificate
described in Section 1.1 hereof.
"Permitted Encumbrances" means and includes (a) the rights of the
Issuer, the Trustee and the Bank and the liens created under the Agreement; (b)
the rights of the Issuer, the Trustee and the Bank created under the Indenture
and assignment of the Agreement; (c) any liens granted to the Bank; and (d)
liens permitted by the Reimbursement Agreement or consented to by the Bank in
writing.
"Plans" means the Obligor's plans and budget specifications for the
Project, in such reasonable detail as to satisfy to the extent applicable the
requirements of Section 9-110 of Act ▇▇. ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇, as
amended, as the same may be revised from time to time in accordance with Article
IV hereof, which plans are on file at the principal office of the Obligor.
"Project" means the acquisition of land, construction on the land of a
manufacturing facility and the acquisition and installation of machinery and
equipment for that facility, as set forth in Exhibit A hereto, including such
modifications thereof, substitutions therefor, and Improvements to the Project,
and excluding such deletions therefrom, as shall be made in accordance with the
Agreement.
"Project Costs" means, as applicable (a) obligations of the Issuer or
the Obligor incurred for labor and to contractors, builders and materialmen in
connection with the acquisition, construction and installation of the Project;
(b) the cost of contract bonds and of insurance of all kinds that may be
required or necessary during the course of construction of the Project which is
not paid by the contractor or contractors or otherwise provided for; (c) all
costs of engineering services, including test borings, surveys, estimates, plans
and specifications and preliminary investigations, and supervising construction,
as well as for the performance of all other duties required by or consequent
upon the proper construction of the Project; (d) Issuance Costs; (e) all other
costs which the Obligor shall be required to pay, under the terms of any
contract or contracts, for the acquisition, construction and installation of the
Project; (f) other costs of a nature comparable to those described in clauses
(a) through (e) above which the Obligor shall be required to pay as a result of
the damage, destruction, condemnation or taking of the Project or any portion
thereof; (g) interest on the Bonds or any interim obligation during the period
of construction of the Project; or (h) any other costs incurred by the Obligor
which are properly chargeable to the Project and which may be financed by the
Bonds under the Act.
"Project Purposes" means use of the Project for manufacturing purposes
during a period of usefulness of the Project of at least 18 years in the
estimate of the Obligor.
The terms "redemption," "redeem" and "redeemed" when used with
reference to the principal of the Bonds, means, when appropriate, prepayment,
prepay and prepaid, respectively.
"Requisition Certificate" means the certificate required by Section 4.1
hereof, in the form of Exhibit B hereto.
PREMISES
The Issuer is empowered under the Act to assist any person, firm or
corporation in the financing of certain projects and facilities, through the
issuance of its limited obligation revenue bonds. The Obligor has proposed the
acquisition and construction of the Project and as an inducement therefor has
requested the Issuer to assist in the financing of the Project and certain other
expenses incidental thereto, as provided in the Act.
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The Issuer has determined that making the Loan to the Obligor will
promote and serve the intended purposes of, and in all respects will conform to
the provisions and requirements of the Act. In order to grant the Loan and
thereby assist in the financing of the Project, the Issuer is issuing the Bonds.
The Issuer, the Trustee and the Obligor understand and intend that the financing
of the Project through issuance of the Bonds and the making of the Loan will be
structured in the following general manner, as detailed in the Indenture and in
the Agreement: The Issuer will issue the Bonds under the Act and use the
principal amount thereof to make the Loan to the Obligor. The Loan shall be
repaid by the Obligor in Loan Repayments sufficient to pay the principal,
premium, if any, and interest on the Bonds as the same become due. From the
proceeds of the Loan, the Obligor will complete the Project. Under the terms of
the Agreement, the Obligor will make Loan Repayments, and will be responsible
for paying any costs of the Project which exceed the principal amount of the
Bonds, for maintaining and insuring the Project, and for paying all taxes and
expenses relating to the Project. The Issuer's obligation with respect to the
Bonds is subject to the limitations therein contained, viz., that the principal,
premium, if any, and interest on the Bonds and any other costs or pecuniary
liability relating to the Bonds, the Loan, the Project or the implementation
thereof or any proceeding, document, or certification incidental to the
foregoing, shall never be payable from tax revenues or public funds of the State
or any agency thereof or general funds or assets of the Issuer, but shall be
payable with Available Moneys solely and only from the Security. The Bonds shall
not be secured by any interest in the Project or other assets of the Obligor.
In addition, as part of the Security for the Loan Repayments, the
Obligor will cause the Credit Facility to be delivered to the Trustee. The
Trustee is instructed in the Indenture to draw under the Credit Facility up to
(a) the principal amount of the Bonds (i) to enable the Trustee to pay the
principal amount of the Bonds when due at maturity, by acceleration of maturity
or otherwise or upon redemption or (ii) to enable the Trustee to pay the portion
of the Purchase Price of Bonds delivered to the Trustee and not remarketed by
the Remarketing Agent equal to the principal amount of such Bonds, plus (b) an
amount equal to 56 days' (or, if required pursuant to Section 208 of the
Indenture, 210 days') interest on the Bonds calculated at the Maximum Rate to
enable the Trustee to pay interest on the Bonds plus (c) if the Credit Facility
is so amended, any premium on the Bonds.
The Issuer's participation in the financing of the Project is intended
to enable the Obligor to utilize certain provisions of the Code. Section 103 of
the Code encourages the construction of certain types of facilities and the
public financing thereof through issuance of limited obligation revenue bonds by
providing that the interest on such bonds, as contrasted with any bonds which
might be issued by the Obligor itself, will be excluded from gross income for
federal income tax purposes. This tax exclusion enables the purchasers of the
Bonds to accept a lower rate of interest than they would otherwise require, and
thereby further reduces the interest cost to the Obligor of financing the
Project.
ARTICLE I
REPRESENTATIONS
Section I.1 Obligor Representations and Covenants Regarding the
Internal Revenue Code. The Obligor makes the following representations and
warranties for the benefit and reliance of the Issuer, the Trustee and the Bank:
(a) The Obligor is a Michigan corporation, is duly organized,
validly existing and in good standing under the laws of the State. The Obligor
(i) has full power and authority to own the properties and assets associated
with the Project and to complete the Project, and (ii) has full power and
authority to execute and deliver the Agreement, the Reimbursement Agreement, the
Bond Purchase Agreement, the Remarketing Agreement and the Pledge Agreement, and
to perform the obligations as contemplated thereunder.
(b) Neither the execution and delivery of the Reimbursement
Agreement, the Bond Purchase Agreement, the Remarketing Agreement, the Pledge
Agreement or the Agreement, nor the consummation of the transactions
contemplated thereby, nor the fulfillment of or compliance with the terms and
conditions of the Reimbursement Agreement, the Bond Purchase Agreement, the
Remarketing Agreement, the Pledge Agreement or the Agreement, will, to the best
knowledge of the Obligor, violate the Articles of Incorporation or Bylaws of the
Obligor, any provision of law, any order of any court or other agency of
government, or any indenture, agreement or other instrument to which the Obligor
is now a party or by which it or any of its properties or assets is bound, or
will be in conflict with, result in a breach of, or constitute a default (with
due notice or the passage of time or both) under, any such indenture, agreement,
or other instrument.
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(c) The Agreement, the Reimbursement Agreement, the Bond
Purchase Agreement, the Remarketing Agreement and the Pledge Agreement have been
duly authorized, executed and delivered and are each valid and binding
obligations of the Obligor enforceable in accordance with their terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws in effect from time to time
affecting the enforceability of creditors' rights generally or by general
principles of equity.
(d) The Obligor intends to occupy the Project or cause the
Project to be occupied and to operate or cause it to be operated at all times
during the term of the Agreement for Project Purposes and does not know of any
reason why the Project will not be so used by it in the absence of supervening
circumstances not now anticipated by it or beyond its control.
(e) The Project will be completed in such manner as to conform
with all applicable zoning, planning, building and other regulations of
governmental authorities having jurisdiction of the Project, all necessary
utilities are or will be available to the Project, and the Obligor has obtained
or will obtain all requisite zoning, planning, building, environmental or other
permits necessary for the construction of the Project for Project Purposes, and
additional permits necessary for the use of the Project are expected to be
obtained upon application at the appropriate times.
(f) The Obligor's estimates of Project Costs, the Completion
Date and period of usefulness of the Project which were supplied to the Issuer
have been made in good faith and are fair, reasonable and realistic.
(g) No litigation or governmental proceeding is pending or, to
the best knowledge of the Obligor, threatened against the Obligor which could
have a material adverse effect on its financial condition or business, or its
power to borrow or repay the Loan.
(h) The Obligor does not have any material contingent
obligations which are not disclosed in writing to the Bank.
(i) All representations and warranties in the Reimbursement
Agreement are incorporated herein as set forth therein.
(j) The Project qualifies as a "project" under the Act and the
Obligor intends to have the Project operated as such during the term of this
Agreement.
(k) The financing of the Project will result in the creation
of approximately 200 new jobs and will not result in the transfer of employment
of more than 20 full-time employees from another municipality to the
Municipality in violation of the Act.
(l) All the net Bond proceeds from the sale of the Bonds will
be expended on the Project to be owned by the Obligor, except for proceeds used
for the payment of costs of issuing the Bonds. Substantially all (at least 95%)
of the costs of the Project are for the acquisition or construction of land or
property of a character subject to the allowance for depreciation.
(m) There are no other bond issues, which together with the
Bonds, are to be used with respect to a single building, an enclosed shopping
mall or a strip of offices, stores or warehouses using substantial common
facilities.
(n) No portion of the Bond proceeds will be used to provide
any airplane, skybox or other private luxury box, any health club facility, any
facility primarily used for gambling or any store the principal business of
which is the sale of alcoholic beverages for consumption off premises.
(o) Less than 25% of the Bond proceeds are to be used directly
or indirectly for the acquisition of land used for other than farming purposes,
and no portion of the Bond proceeds is to be used, directly or indirectly for
the acquisition of land used for farming purposes.
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(p) None of the Bond proceeds is to be used for the
acquisition of any property (or an interest therein) the first use of which
property is not pursuant to such acquisition unless certain rehabilitation
requirements as provided in Code Section 147(d) are met.
(q) Substantially all (at least 95%) of the net proceeds of
the Bonds (face amount) and all of the earnings on Bond proceeds deposited in
the Project Fund will be used to provide manufacturing facilities within the
meaning of Code Section 144(a)(12)(C). For this purpose, the term "manufacturing
facility" means any facility which is used in the manufacturing or production of
tangible personal property (including the processing resulting in a change in
the condition of such property). The term "manufacturing facility" includes
facilities which are directly related and ancillary to a manufacturing facility
(determined without regard to this sentence) if a) such facilities are located
on the same site as the manufacturing facility and b) not more than 25% of the
net proceeds of the Bonds are used to provide such facilities. The Obligor, for
purposes of this representation, is able to meet all of the criteria below
regarding manufacturing facilities. Office space is directly related and
ancillary to a manufacturing facility where such office is located on the
premises of the manufacturing facility and not more than a de minimis (5%)
portion of the functions to be performed at such office is not directly related
to the day-to-day operations at such manufacturing facility. Facilities for the
short-term warehousing of raw materials incidental to production or the
temporary warehousing of finished product constitute facilities directly related
and ancillary to a manufacturing facility. An on-site laboratory whose purpose
is to test the manufactured product for quality or to experiment with different
materials which might be used as raw materials for the product may be directly
related and ancillary to a manufacturing facility. Loading docks or rail spurs
to unload raw materials or load finished products may be directly related and
ancillary. Forklifts or similar equipment are directly related and ancillary to
a manufacturing facility, but trucks or vans to deliver the final product are
not. A showroom staffed with full-time sales personnel is outside the scope of a
manufacturing facility.
(r) Except as is permitted by Code Section 149(b), the Bonds
are not federally guaranteed within these provisions; specifically the payment
of principal or interest with respect to the Bonds is not guaranteed in whole or
in part by the United States or any agency or instrumentality thereof; the Bonds
are not issued as part of an issue a significant portion of the proceeds of
which is to be used in making loans the payment of principal or interest with
respect to which is to be guaranteed in whole or in part by the United States or
any agency or instrumentality thereof, or invested directly or indirectly in
federally insured deposits or accounts; and the payment of principal or interest
on the Bonds is not otherwise indirectly guaranteed in whole or in part by the
United States or an agency or instrumentality thereof.
(s) The sum of the authorized face amount of the Bonds
allocable to each test-period beneficiary (as defined in Code Section
144(a)(10)) plus the respective aggregate face amount of all tax-exempt
facility-related bonds presently outstanding (not including any obligations
which are to be redeemed from the proceeds of the Bonds) which are allocable to
each such test-period beneficiary does not exceed $40,000,000. The Obligor will
not sell, lease or enter any other arrangement having the effect of causing
another person to become a beneficiary of the Bond financed facility during the
test-period which would have the effect of making interest on the Bonds
includable in the gross income for federal income tax purposes of the holder
thereof.
(t) No more than 2% of the proceeds of the Bonds will be
used for any Issuance Costs.
(u) The weighted average maturity of the Bonds does not exceed
120% of the weighted average reasonably expected economic life of the Project
financed with the net proceeds of the Bonds pursuant to Code Section 147(b).
(v) No more than 25% of the net proceeds of the Bonds will be
used to provide a facility the primary purpose of which is one of the following:
retail food and beverage service, automobile sales or service, or the provision
of recreation or entertainment pursuant to Code Section 144(a)(8)(A).
(w) No portion of the proceeds of the Bonds will be used to
provide any of the following: any private or commercial golf course, country
club, massage parlor, tennis club, skating facility (including roller skating,
skateboard, and ice skating), racquet sports facility (including any handball or
racquetball court), hot tub facility, suntan facility, or racetrack pursuant to
Code Section 144(a)(8)(B).
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(x) There are no "private activity bonds" as defined in
Section 103 of the Code outstanding on the Effective Date, the proceeds of which
have been or shall be used with respect to any facility located in the
Municipality of which the Obligor or a related person to the Obligor is a
principal user.
(y) The face amount of the Bonds, plus the aggregate amount of
capital expenditures (excluding capital expenditures paid for with proceeds of
the Bonds) by the Obligor, any "related person" thereto, any principal user of
the Project, and any "related person" thereto (all within the meaning ascribed
in Code Section 144(a)(4)) in the Municipality and areas contiguous thereto or
attributed to the Municipality beginning three years before the Effective Date
and ending three years after the Effective Date do not and will not exceed
$10,000,000. In addition, the Obligor will not violate any other provisions of
the Code relating to the foregoing.
(z) No expenditures for the Project were made prior to 60 days
before the Issuer adopted its official intent resolution for the Project on the
Inducement Date.
(aa) The Project has not been "placed in service" more than 18
months prior to the date of issuance of the Bonds and no expenditure to be
reimbursed with proceeds of the Bonds was made more than three years prior to
the date of issuance of the Bonds.
(bb) Other than the Bonds, there are no other tax exempt
obligations issued for the benefit of the Obligor or any "related person" which
were or are to be sold (a) within 15 days of the Effective Date, (b) pursuant to
the same plan of financing as the Bonds, and (c) payable from the same source of
funds as the Bonds.
(cc) All representations and warranties of the Obligor set
forth in the Non-Arbitrage Certificate and the Borrower's Questionnaire of the
Obligor, each dated the Effective Date (including exhibits thereto) will be true
and correct as of that date.
Section 1.2 Additional Covenants. The Obligor hereby covenants that,
unless advised otherwise by Bond Counsel, the Obligor will comply with the
following:
(a) Any proceeds received upon the sale of any of the property
which is included in the Project (i) will be invested at a yield not in excess
of the yield on the Bonds and used for the purpose of redeeming the Bonds at the
first subsequent call date, or (ii) will be used for the purpose of acquiring
property performing the same function as the disposed Project property.
(b) If part or all of the Project wears out or becomes
obsolete so that it is no longer functional to the Obligor and the Obligor deems
it appropriate to dispose of such portion of the Project and, only if, the
Obligor or any related party thereto receives no economic benefit from the
disposal thereof, then the Obligor may dispose of such property other than as
provided in (a) above.
(c) The Obligor will not use accelerated depreciation for
federal income tax purposes for any part of the Project financed with proceeds
of the Bonds.
Section 1.3 Issuer Findings and Representations.
(a) The Issuer has the necessary power under the Act, and has
duly taken all action on its part required to authorize, execute and deliver the
Agreement and to issue the Bonds. The execution and performance by the Issuer of
its obligations under this Agreement will not violate or conflict with any
instrument by which the Issuer or its properties are bound.
(b) All of the proceedings approving the Agreement and the
Indenture relating to the Bonds were conducted by the Issuer at meetings which
complied with Act ▇▇. ▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇, as amended.
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(c) No member of the Board of Directors of the Issuer is
directly or indirectly a party to or in any manner whatsoever interested in the
Agreement, the Indenture, the Bonds or the proceedings related thereto.
Section I.4 Additional Bonds. At the request of the Obligor the Issuer
may, but shall not be required to, authorize the issuance of Additional Bonds in
accordance with Section 112 of the Indenture. Additional Bonds shall not be
issued without the prior written consent of the Bank. The terms of any
Additional Bonds shall be approved in writing by the Obligor. Additional Bonds
may be issued only to finance any one or more of the following: (i) the costs of
making Improvements to the Project; (ii) the refunding of all or any part of the
Bonds; and (iii) the Issuance Costs relating to the Additional Bonds and other
costs reasonably related to the financing as shall be agreed upon by the Obligor
and the Issuer. Any Improvements to the Project acquired with the proceeds of
the Additional Bonds shall become a part of the Project and shall be included
under the Agreement. Refusal for any reason by the Issuer to issue Additional
Bonds shall not release the Obligor from any provisions of the Agreement.
ARTICLE II
THE BONDS AND THE PROCEEDS THEREOF
Section II.1 The Bonds. The Issuer has authorized the issuance and sale
of the Bonds. Upon issuance and delivery of the Bonds, the proceeds of the sale
of the Bonds derived by the Issuer shall be deposited with the Trustee as
follows: (a) in the Bond Fund, a sum equal to the accrued interest, if any, on
the Bonds and (b) in the Project Fund, the balance of the proceeds of sale of
the Bonds. The obligations of the Issuer and the Obligor under the Agreement are
expressly conditioned upon delivery of the Bonds and receipt of the proceeds
thereof.
Section II.2 Issuer Action on Redemption. The Issuer shall, at the
request of the Obligor in the case of an optional redemption, or at the request
of the Trustee in the case of a mandatory redemption on expiration of the Credit
Facility, a mandatory redemption on Determination of Taxability or mandatory
redemption from Surplus Bond Proceeds, forthwith take all steps as may be
necessary under the Indenture to effect the earliest practicable redemption, as
provided under the Indenture, of any or all of the Bonds or portions thereof as
may be specified by the Obligor or Trustee, as the case may be.
In the event of an optional redemption, mandatory redemption on
Determination of Taxability or mandatory redemption on expiration of the Credit
Facility, unless such redemption is effected in connection with a refunding, the
Obligor will pay or cause to be paid pursuant to a draw on the Credit Facility
(or, with respect to any premium, if premium is not covered by the Credit
Facility, with Available Moneys) an amount equal to the applicable redemption
price as a prepayment of the principal amount of the Loan corresponding to such
Bonds or portions thereof and interest accrued to the redemption date.
In the case of an extraordinary optional redemption, the Obligor's
direction to the Issuer to redeem shall be given, if at all, within six months
following the occurrence of the event giving rise to such redemption.
In the event the Obligor receives notice under the provisions in the
Bond Forms Appendix entitled Mandatory Redemption on Determination of Taxability
that a proceeding has been instituted which could lead to a determination that
interest on the Bonds is includable in gross income for federal income tax
purposes and the resultant Mandatory Redemption on Determination of Taxability,
the Obligor shall promptly notify the Trustee, the Bank and the Issuer of such
proceeding.
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Section II.3 Investment of Bond Fund and Project Fund; Non-Arbitrage
Covenant. Any moneys held as part of the Bond Fund or Project Fund shall be
invested, reinvested or applied by the Trustee in accordance with and subject to
the conditions of Article VII of the Indenture. The Obligor and the Issuer shall
make no use of the proceeds of the Bonds, or any funds which may be deemed to be
proceeds of the Bonds pursuant to Section 148 of the Code and the applicable
regulations thereunder, which, if such use had been reasonably expected on the
date of issuance of the Bonds, would have caused the Bonds to be "arbitrage
bonds" within the meaning of such Section and such regulations, and the Obligor
shall comply with the requirements of such Section and such regulations
throughout the term of the Bonds as provided by and required in the
Non-Arbitrage Certificate, the terms of which are incorporated herein and made a
part hereof by this reference. The Obligor shall comply, for itself and on
behalf of the Issuer, with all requirements of the Code. In particular, the
Obligor will compute rebate due, if any, under Section 148 of the Code, pay any
rebate due under the Code and retain records as required by the Code.
Section II.4 Credit Facility. The Obligor shall cause the Credit
Facility to be delivered to the Trustee on or before the Effective Date. The
Credit Facility shall (a) be in an amount equal to the aggregate principal
amount of the Bonds outstanding from time to time plus 56 days' (or if required
pursuant to Section 208 of the Indenture, 210 days') interest thereon calculated
at the Maximum Rate; (b) provide for payment to the extent of the amount
specified in the preceding clause (a) in immediately available funds to the
Trustee (upon receipt of the Trustee's request for payment of the principal of,
premium, if any, and/or interest on the Bonds then outstanding on any Bond
Payment Date, proposed Conversion Date, Conversion Date, Substitution Date,
Purchase Date or redemption date pursuant to the Indenture); and (c) provide an
expiration date no earlier than the earliest of (i) the payment in full by the
Bank of funds authorized to be drawn thereunder so that there are no outstanding
Bonds (ii) the honoring by the Bank of a draft on the Credit Facility for all
outstanding Bonds, (iii) a stated expiration date, (iv) the day after any
Conversion Date, or (v) the fifteenth day following an Event of Default pursuant
to Section 801(d) of the Indenture. The Obligor will cause any extension of the
Credit Facility to be deposited by the Bank with the Trustee at least 60 days
prior to the last Interest Payment Date prior to the expiration of the Credit
Facility or Substitute Credit Facility then in effect. Each extension of the
Credit Facility shall be satisfactory in form and substance to the Trustee. Upon
the conversion of the Bonds to Fixed Rate Bonds, the Bonds may, but need not, be
secured by a Credit Facility. The Obligor shall have the right to provide a
Substitute Credit Facility in accordance with Section 210 of the Indenture.
Section II.5 Tender. The Issuer agrees to cause the Trustee in the
Indenture to act as tender agent for the Obligor in connection with certain
tenders of Variable Rate Bonds and as tender agent for the Bank in connection
with certain other tenders of Variable Rate Bonds, all as provided in Article II
of the Indenture.
Section II.6 Remarketing Agent. The Obligor hereby approves of the
appointment of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated as the initial Remarketing
Agent and covenants and agrees that, without prior written notice to the Trustee
and without written approval by the Bank, it will not change the Remarketing
Agent.
Section II.7 Right to Exercise Conversion Option. Subject to the
ability of the Obligor to satisfy certain conditions described in the Indenture,
the right is reserved to the Obligor, upon receipt of prior approval from the
Bank (but only if the existing Credit Facility will remain in effect following
the proposed conversion or, in any event, if a draw may be made on the existing
Credit Facility in connection with the proposed conversion), to exercise the
conversion option in accordance with the Indenture.
Section II.8 Rebate Account. The Obligor covenants and agrees that it
will create and maintain on its books and records a "Rebate Account" as required
to comply and evidence compliance with Section 2.3 hereof.
ARTICLE III
THE LOAN AND LOAN REPAYMENTS
Section III.1 The Loan. Concurrently with the delivery of the Bonds,
the Issuer will, upon the terms and conditions of the Agreement, lend to the
Obligor, by deposit of the proceeds thereof with the Trustee in the Project
Fund, an amount equal to the principal amount of the Bonds for application to
Project Costs. The accrued interest, if any, received by the Issuer upon the
sale of the Bonds shall be deposited into the Bond Fund and shall be applied to
the first interest due on such Bonds.
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Section III.2 Loan Repayments; Credit Facility. Except as hereinafter
provided, the Obligor shall pay or cause to be paid, in immediately available
funds, to the Trustee, for the account of the Issuer, loan repayments
corresponding to the principal, premium, if any, Purchase Price and interest
payments on the Bonds when due (the "Loan Repayments"); in lieu of such
payments, the Trustee shall draw on the Credit Facility, pursuant to Section 209
of the Indenture, amounts equal to such Loan Repayments. So long as the Credit
Facility is in effect, the Loan Repayments representing principal of, premium,
if any (if the Credit Facility then covers such premium), Purchase Price and
interest payments on the Bonds shall be made by deposits of the proceeds of
drawings under the Credit Facility and the Obligor shall reimburse the Bank in
accordance with the Reimbursement Agreement.
Payments of the principal and Purchase Price of, premium, if any, or
interest on the Bonds shall be made solely from the Security, including draws
under the Credit Facility (except with respect to premium unless the Credit
Facility has been amended to cover premium on the Bonds). The Obligor's
obligation to make Loan Repayments is and shall remain unconditional regardless
of the sufficiency and availability of Available Moneys to make such payments.
With the prior written approval of the Bank and written notice to the
Issuer and the Trustee, the Obligor may prepay in whole or in part amounts due
on account of the Loan Repayments or for the redemption of Bonds prior to
maturity or purchase, but such prepayment shall not in any way alter or suspend
any of the obligations of the Obligor under the terms of the Agreement and the
Obligor shall continue to perform and be responsible for the performance of all
other terms and provisions. Such notice shall be given at least 10 Business Days
before the Trustee is to give notice of any related redemption pursuant to
Article IV of the Indenture.
The Issuer agrees that the Trustee may accept such prepayments when the
same are tendered by the Obligor and that such prepayments may be directed by
the Obligor to be used for credit on Loan Repayments or for the redemption or
purchase of Bonds in the manner and to the extent provided herein and in the
Indenture.
In the event the Obligor prepays Loan Repayments in the following
manner and in accordance with the provisions of the Indenture: (a) in Available
Moneys, after delivering the No Act of Bankruptcy Certificate attached hereto as
Exhibit D to the Trustee or (b) by causing the Trustee to draw on the Credit
Facility, for deposit in the Bond Fund an amount of money which, together with
amounts then on deposit in the Bond Fund and available therefor, shall be
sufficient (i) to retire and redeem at the earliest date(s) permitted under the
Indenture all of the then outstanding Bonds and (ii) to pay any interest
accruing on the Bonds to maturity or redemption and shall also make provision
satisfactory to the Issuer and the Trustee for all fees, costs and expenses
specified in Article V hereof accruing through the final payment of the Bonds,
then the Loan shall be deemed fully repaid and canceled, and the lien of the
Indenture shall be discharged, except for the provisions providing for payment
of principal and Purchase Price of, premium, if any, and interest to the
Bondholders.
ARTICLE IV
THE PROJECT
Section IV.1 Project Fund Disbursements. There is established with the
Trustee under the Indenture the Project Fund, the moneys in which, subject to
the terms hereof and of the Indenture, and subject to the security interest
therein granted by the Obligor to the Issuer, shall be the property of the
Obligor. Unless an Event of Default has occurred and is continuing which the
Trustee is required to take notice of or is deemed to have notice of pursuant to
Section 901(h) of the Indenture, the Trustee, as authorized by the Bank pursuant
to the Indenture, shall disburse to or for the benefit of the Obligor out of the
Project Fund the lesser of (a) the Project Costs, or (b) the proceeds of the
Bonds deposited in the Project Fund and investment income in the Project Fund.
Such disbursements shall be made from time to time to pay Project Costs so long
as there are moneys in the Project Fund, upon presentation of Requisition
Certificate(s) executed by the Obligor and approved for payment in writing by
the Bank. The Trustee may also disburse moneys out of the Project Fund to or for
the benefit of the Issuer upon the Obligor's failure to pay the fees, costs and
expenses of the Trustee or Issuance Costs as required by Section 5.2 hereof.
Disbursements from the Project Fund shall be made upon the Trustee's
receipt of an executed and approved Requisition Certificate.
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The Obligor shall also deliver or cause to be delivered to the Trustee
with a Requisition Certificate such other documents and certificates as may be
required by the Bank, it being understood that the Trustee shall have no duty to
review or approve such documents and certificates.
Upon the occurrence of an Event of Default under the Indenture, any
moneys in the Project Fund shall be transferred by the Trustee to the Bond Fund.
Upon request and with reasonable notice, the Obligor shall permit the
Trustee or the Issuer or its authorized agents to audit the records of the
Obligor relating to Project Costs during normal business hours.
Section IV.2 Obligation of the Obligor to Complete the Project. The
Obligor shall proceed with reasonable dispatch to complete the Project
substantially in accordance with the Plans. The Obligor may revise the Plans,
subject to the General Limitations and under the conditions contained in this
section.
The Issuer makes no warranty, either express or implied, and offers no
assurance as to the condition of the Project or that the Project is or will be
suitable for the Obligor's purposes, or that the proceeds derived from the sale
of the Bonds will be sufficient to pay all Project Costs, and the Issuer shall
not be liable to the Obligor if for any reason the Project is not completed. In
the event moneys in the Project Fund are insufficient to pay all Project Costs,
the Obligor will complete the Project and pay the Project Costs in excess of the
sum of moneys available in the Project Fund. By reason of the payment of any
such portion of the Project Costs, the Obligor shall not be entitled to any
reimbursement from the Issuer, the Trustee or the holders of the Bonds in
respect thereof or to any diminution or abatement in the Loan Repayments payable
under the Agreement.
Section IV.3 Completion Certificate. The Obligor shall as promptly as
practicable file with the Trustee, the Issuer and the Bank a certificate
substantially in the form of Exhibit C attached hereto when the Project is
complete. All moneys deposited in the Project Fund and not needed, as of the
Completion Date, to pay or reimburse Project Costs (which moneys shall be used
for such purposes if needed), shall, upon receipt of such certificate, and in
any event on the third anniversary hereof, be deemed Surplus Bond Proceeds and
shall be immediately transferred to the Bond Fund to be applied by the Trustee
in the manner provided in Section 4.4 of this Agreement.
Section IV.4 Use of Surplus Bond Proceeds. All moneys transferred to
the Bond Fund pursuant to the provisions of Section 4.3, Section 6.1 and Article
VII hereof ("Surplus Bond Proceeds") shall be applied by the Trustee for
redemption of the Bonds pursuant to Mandatory Redemption from Surplus Bond
Proceeds as provided in the Bond Forms Appendix to the Indenture or
reimbursement of the Bank for honoring a drawing under the Credit Facility for
such purpose, or may be used for any other purpose approved in writing by the
Bank which is permitted by the Act and which, in the opinion of Bond Counsel,
will not affect the exclusion from gross income for federal income tax purposes
of interest on the Bonds. Prior to such use, such Surplus Bond Proceeds shall
not be invested at a yield in excess of the yield on the Bonds, unless, in the
opinion of Bond Counsel, the investment of Surplus Bond Proceeds at a yield in
excess of the yield on the Bonds will not affect the exclusion from gross income
for federal income tax purposes of the interest on the Bonds.
In no event shall Surplus Bond Proceeds so transferred to the Bond Fund
or the investment income thereon be used to pay interest on the Bonds.
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ARTICLE V
OTHER PECUNIARY OBLIGATIONS OF THE OBLIGOR
Section V.1 Taxes and Other Costs. The Obligor shall promptly pay, as
the same become due, all lawful taxes and governmental charges of any kind
whatsoever, including without limitation income, profits, receipts, business,
property and excise taxes, with respect to any estate or interest in the
Project, the Agreement, the Loan or any payments with respect to the foregoing,
the costs of all building and other permits to be procured, and all utility and
other charges and costs incurred in the operation, maintenance, use, occupancy
and upkeep of the Project. The Obligor shall furnish the Issuer upon request
proof of payment of any such taxes, charges or costs. The Obligor may in good
faith contest, and during such contest not pay, any such taxes, charges and
costs, as provided in the Reimbursement Agreement.
Section V.2 Issuer Fees and Expenses. The Obligor shall pay all
Issuance Costs and other reasonable out-of-pocket costs and expenses of the
Issuer incidental to the performance of its obligations under the Agreement, the
Indenture and with respect to its authorization, sale and delivery of the Bonds,
including without limitation on or before the Effective Date the Issuer's
Issuance Fee, or reasonably incurred by the Issuer in enforcing the provisions
of the Agreement or the Indenture.
Section V.3 Fees and Expenses of the Trustee and Remarketing Agent. The
Obligor shall pay the reasonable fees, costs, expenses and advances of the
Trustee, and the Remarketing Agent under the Indenture for services rendered in
connection with the Bonds, the duties and services of such Trustee being set out
in the Indenture, and it shall pay the Trustee, in addition, all reasonable
out-of-pocket counsel fees, taxes and other fees, costs and expenses reasonably
incurred by the Trustee in performing its duties as Trustee and in entering into
the Indenture. All such payments shall be made as statements are rendered and
shall be made by the Obligor directly to the Trustee except to the extent fees,
costs, expenses and advances of the Trustee incurred in connection with the
issuance of the Bonds are paid from proceeds of sale of the Bonds.
Section V.4 Indemnification of the Issuer.
(a) The Issuer and its members, officers, agents and employees
(hereinafter, the "Indemnified Persons") shall not be liable to the Obligor for
any reason. The Obligor shall indemnify and hold the Issuer and the Indemnified
Persons harmless from any loss, expense (including reasonable counsel fees), or
liability of any nature due to any and all suits, actions legal or
administrative proceedings, or claims arising or resulting from, or in any way
connected with:
(i) the financing, installation, operation, use,
or maintenance of the Project,
(ii) any act, failure to act, or misrepresentation by
any person, firm, corporation or governmental agency,
including the Issuer, in connection with the issuance, sale,
remarketing or delivery of the Bonds,
(iii) any act, failure to act, or misrepresentation
by the Issuer in connection with this Agreement or any other
document involving the Issuer in this matter, or
(iv) the selection and appointment of firms providing
services to the Bond transaction.
If any suit, action or proceeding is brought against the Issuer or any
Indemnified Person, that action or proceeding shall be defended by counsel to
the Issuer or the Obligor, as the Issuer shall determine. If the defense is by
counsel to the Issuer, which is the Attorney General of the State, or may in
some instances be private, retained counsel, the Obligor shall indemnify the
Issuer and Indemnified Persons for the reasonable cost of that defense including
reasonable counsel fees. If the Issuer determines that the Obligor shall defend
the Issuer or Indemnified Person, the Obligor shall immediately assume the
defense at its own cost. The Obligor shall not be liable for any settlement of
any proceedings made without its consent (which consent shall not be
unreasonably withheld).
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(b) The Obligor shall also indemnify the Issuer for all
reasonable costs and expenses, including reasonable counsel fees, incurred in:
(i) enforcing any obligation of the Obligor
under this Agreement or any related agreement,
(ii) taking any action requested by the Obligor,
(iii)taking action required by this Agreement or any
related agreement, or
(iv) taking any action considered necessary by the
Issuer and which is authorized by this Agreement or any
related agreement.
(c) The obligations of the Obligor under this Section shall
survive any assignment or termination of this Agreement.
(d) The Obligor shall not be obligated to indemnify the Issuer
or any Indemnified Person under subsection (a) if a court with competent
jurisdiction finds that the liability in question was caused by the willful
misconduct or sole gross negligence of the Issuer or the involved Indemnified
Person(s), unless the court determines that, despite the adjudication of
liability but in view of all circumstances of the case, the Issuer or the
Indemnified Person(s) is (are) fairly and reasonably entitled to indemnity for
the expenses which the court considers proper.
Section V.5 Indemnification of the Trustee. The Obligor shall indemnify
and hold the Trustee harmless against any loss, liability or expense, including
reasonable attorneys' fees, or settlement costs incurred without breach of the
required standard of care set forth in the Indenture arising out of or in
connection with claims or actions taken under or pursuant to the Indenture,
including the costs and expenses of defense, including counsel selected by the
Trustee, against any such claim or action or liability. Notwithstanding anything
to the contrary in this Agreement, the Obligor expressly acknowledges and agrees
that the obligations and liabilities of the Obligor as set forth in this Section
5.5 shall survive the resignation or removal of the Trustee.
Section V.6 Insurance. The Obligor shall continuously insure against
such risks and in such amounts as are required under the Reimbursement
Agreement.
ARTICLE VI
PROJECT MAINTENANCE
Section VI.1 Maintenance and Operation; Removal from Site. The Obligor,
at its expense, shall maintain the Project in good condition, repair and working
order, and shall make or cause to be made from time to time all necessary
repairs, renewals and replacements, ordinary wear and tear and obsolescence
excepted. Any property comprising a portion of the Project and purchased with
Bond proceeds may not be removed from the site of the Project without the prior
written consent of the Bank and unless (i) other property of equivalent or
greater value and utility is substituted therefor or (ii) the proceeds of the
sale of such property are used in accordance with Section 1.2(a) hereof, subject
to the provisions of Section 1.2(b) hereof or (iii) the Obligor receives an
opinion of Bond Counsel that noncompliance with (i) or (ii) above will not
affect the exclusion of interest on the Bonds for federal income tax purposes
under the Code and the Act.
Section VI.2 Remodeling and Modifications. The Obligor may remodel or
modify the Project as it, in its discretion, may deem to be desirable for its or
any tenant's uses and purposes; provided that such remodeling or modifications
shall not violate the General Limitations. The cost of such remodeling,
modifications or improvements shall be paid by the Obligor.
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ARTICLE VII
DAMAGE TO PROJECT AND CONDEMNATION
In the event (i) the Project is damaged or destroyed, or (ii) failure
of title to all or part of the Project occurs or title to or temporary use of
the Project is taken in condemnation or by the exercise of the power of eminent
domain by any governmental body or by any person, firm or corporation acting
under governmental authority, the Obligor shall promptly give written notice
thereof to the Issuer, the Trustee and, if the Credit Facility is in effect at
the time, the Bank. As soon as practicable the Obligor shall elect in writing to
the Issuer, the Bank and the Trustee, and with the written consent of the Bank
as required by the Reimbursement Agreement, whether to deposit insurance or
condemnation proceeds in the Project Fund or in the Bond Fund. If the Obligor
shall elect to deposit such proceeds in the Project Fund, it shall proceed to
restore the Project with reasonable dispatch, and such moneys shall be disbursed
in accordance with Section 4.1 of this Agreement. If the Obligor shall elect to
deposit such proceeds in the Surplus Bond Proceeds Account in the Bond Fund,
such proceeds shall be used to redeem the Bonds to the extent of such proceeds
in the manner provided in the Indenture and in the Bond Forms Appendix under
Mandatory Redemption from Surplus Bond Proceeds. As long as any of the Bonds are
outstanding, absent an approving opinion of Bond Counsel, all such funds shall
not be invested at a yield in excess of the yield on the Bonds prior to their
expenditure.
ARTICLE VIII
ACTIONS AFFECTING OBLIGOR AND ISSUER
INTERESTS IN THE AGREEMENT AND THE PROJECT
Section VIII.1 Assignment of the Agreement. The Issuer shall assign its
rights under and interest in the Agreement (except Reserved Rights) and in all
moneys deposited in the various Funds under the Agreement and the Indenture to
the Trustee pursuant to the Indenture as security for payment of the principal
of and interest on the Bonds, and such assignment shall entitle the Trustee to
enforce any obligation of the Obligor under the Agreement. The Obligor hereby
consents to any and all assignments described in the preceding sentence or set
forth in the Indenture. The Issuer shall not amend the Indenture without the
written consent of the Obligor, the Trustee and the Bank, as provided in the
Indenture.
Pursuant to the Act, the assignment of the Issuer's rights and
interests pursuant to this Section 8.1 shall be valid and binding from the time
this assignment is made. The money or property pledged and thereafter received
by the Issuer immediately shall be subject to a lien in favor of the Trustee
without a physical delivery, filing, or any further act. The lien of the Trustee
shall be valid or binding as against parties having claims of any kind in tort,
contract, or otherwise, against the Issuer irrespective of whether the parties
have notice. Neither this Agreement, the Indenture, nor any other instrument by
which the assignment is made need be filed or recorded.
Section VIII.2 Obligor's Interest in the Agreement. The Obligor shall
not assign or transfer its rights or obligations under the Agreement, except as
permitted in the Agreement or consented to in writing by the Bank (which consent
may be granted or withheld in the Bank's sole discretion) and as long as the
General Limitations are complied with.
Section VIII.3 Liens by the Obligor. The Obligor shall not create or
permit the creation of any lien, encumbrance or charge upon the Project except
Permitted Encumbrances.
Section VIII.4 Security Interest in the Project Fund. To better secure
its obligations hereunder, including the obligation to pay Loan Repayments as
and when they are due, the Obligor hereby grants a security interest in the
moneys at any time held in the Project Fund, and any proceeds thereof, to the
Issuer and the Bank (to the extent the Trustee is directed to disburse such
moneys to the Bank pursuant to the Indenture) to be perfected by possession of
such moneys in the Project Fund by the Trustee and held therein for the benefit
of the Bondholders and Bank as provided in the Indenture.
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ARTICLE IX
FURTHER OBLIGATIONS OF THE OBLIGOR
Section IX.1 Compliance with Laws. The Obligor shall, throughout the
term of the Agreement and at no expense to the Issuer, promptly comply or cause
compliance with all legal requirements of duly constituted public authorities
which are applicable to the Project or to the repair and alteration thereof, or
to the use or manner of use of the Project. Notwithstanding the foregoing, but
subject to the General Limitations, the Obligor may exercise its rights to
contest the legality of any such legal requirement as applied to the Project
provided that in the opinion of Counsel such contest shall not in any way
materially adversely affect or impair the obligations of the Obligor under the
Agreement or the exclusion of interest on the Bonds from gross income for
federal income tax purposes.
Section IX.2 Maintenance of Assets; Ownership of Project.
(a) The Obligor, unless and until the Project shall be sold
and transferred to a new owner under paragraph (b) or (c) of this Section 9.2,
will do or cause to be done all things necessary to perform its obligations
under this Agreement and the other documents contemplated hereby and by the
Reimbursement Agreement. Except as provided in paragraph (b), the Obligor shall
not cause or permit the Project or any interest therein to be sold, assigned or
transferred.
(b) So long as no Event of Default shall have occurred and be
continuing hereunder, the Project may be conveyed and transferred and this
Agreement assigned to a new owner, which assignment must be in compliance with
the General Limitations and with the prior written consent of the Bank (which
consent may be granted or withheld in the Bank's sole discretion), and without
the consent of the Trustee or any Bondholder; provided that (i) the new owner
shall be a partnership, limited liability company or corporation duly organized
and validly existing in good standing under the laws of any state and qualified
to do business in Michigan and shall assume in writing the obligations of the
Obligor under this Agreement and the other documents contemplated hereby and
(ii) the Obligor shall, at least 30 days prior to any such assignment or
transfer, provide the Issuer and the Trustee with written notice of such
transfer accompanied by a copy of the assumption agreement and an opinion of
nationally recognized bond counsel that such transfer will not cause or result
in interest on the Bonds to be included in gross income for federal income tax
purposes.
(c) The Obligor shall at all times operate the Project or
cause the Project to be operated in strict compliance with the terms of this
Agreement so that it fulfills the public purposes of the Act.
Section IX.3 General Limitations with Respect to Non-Impairment of
Tax-Exempt Status of the Bonds. Notwithstanding any other provisions of the
Agreement or any rights of the Obligor under the Agreement, the Obligor shall
not take or permit to be taken by its agents or assigns any action which, or
fail to take any reasonable action the omission of which, would
(i) impair the exclusion of interest on the Bonds from
gross income for federal income tax purposes; or
(ii) affect the validity of the Bonds under the Act; or
(iii) materially alter the scope, character, value, operation
or utility of the Project.
In addition, the Obligor shall comply, for itself and on behalf of the Issuer,
with all requirements of the Code. The Issuer and the Trustee, upon notification
of action to be taken by the Obligor or prior to taking any action requested by
the Obligor under the Agreement may require at the expense of the Obligor, an
opinion of Counsel or an Engineer or both, as may be appropriate, in writing
with respect to compliance with the foregoing General Limitations.
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Section IX.4 Access to Project and Records. Subject to reasonable
security and safety regulations and reasonable requirements as to notice, the
Issuer, the Trustee, the Bank and their duly authorized agents shall have the
right at all reasonable times to enter and inspect the Project. The Issuer, the
Trustee, the Bank and their duly authorized agents shall also have the right to
inspect the books and records of the Obligor pertaining to the Project and the
Security (as defined in the Indenture), subject to reasonable requirements as to
notice and during regular business hours.
Section IX.5 Requirements of Tenants. If any portion of the Project is
leased to another person, the Obligor shall use its best efforts to require each
of its tenants occupying space in the Project within three years from the
Completion Date in provisions of its lease or by means of a written certificate
(a) to warrant and represent that it will not take or permit to be taken by its
agents or assigns any action which, or fail to take any action the omission of
which, would impair the exclusion of interest on the Bonds from gross income for
federal income tax purposes, including a violation of the capital expenditure
limitation of Section 144(a) of the Code, (b) to warrant and represent that it
will for a period of three years after the date of original issuance of the
Bonds, in the case of any tenant who occupies a sufficient portion of the
Project to be a principal user of the Project under Section 144(a) of the Code,
to file with the Obligor an annual report of its applicable capital
expenditures, (c) to attach to the lease or certificate, a certificate of
applicable capital expenditures within the Municipality for the period of three
years prior to the issuance of the Bonds and any contemplated capital
expenditures for a period of three years after the issuance of the Bonds, and
(d) to attach to the lease or certificate a Prior Issue Certificate in the form
attached hereto as Exhibit E.
ARTICLE X
EVENTS OF DEFAULT AND REMEDIES
Section X.1 Events of Default. The term "Event of Default" shall mean,
whenever used in the Agreement, any one or more of the following events:
(a) Failure by the Obligor to pay any Loan Repayments in the
amounts and at the times provided in the Agreement, but if and only if the Bank
has, after demand under the Credit Facility, failed to pay the amount of such
Loan Repayment as and when due.
(b) Failure by the Obligor to observe and perform any other
obligations in this Agreement on its part to be observed or performed for a
period of 30 days after written notice specifying such failure and requesting
that it be remedied, given to the Obligor by the Issuer, the Bank or the
Trustee; provided, however, that if such Default shall be such that it cannot be
corrected within such period, it shall not constitute an Event of Default if the
Default is correctable without material adverse effect on the Bonds and if
corrective action is instituted by the Obligor within such period and is
diligently pursued until the Default is corrected.
(c) Any representation or warranty made by the Obligor in any
document delivered by the Obligor to the initial purchasers, the Trustee, the
Bank or the Issuer in connection with the issuance, sale and delivery of the
Bonds is untrue in any material adverse respect.
(d) The occurrence of an Event of Default under the Indenture.
(e) The occurrence of an Event of Default under the
Reimbursement Agreement.
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The Events of Default described in subsection (b) above are also
subject to the following limitation: If the Obligor by reason of force majeure
is unable to carry out or observe the obligations described in such subsection
(b), the Obligor shall not be deemed to be in breach or violation of this
Agreement or in default during the continuance of such inability. The term
"force majeure" as used herein shall include, without limitation, acts of public
enemies; insurrections; riots; epidemics; landslides; lightning; earthquake;
fire; hurricanes; tornadoes; storms; floods; washouts; droughts; arrests; civil
disturbances; labor disturbances or strikes; explosions; breakage or accident to
machinery, transmission pipes or canals; partial or entire failure of utilities;
or any other cause or event other than financial inability not reasonably within
the control of the Obligor. The Obligor agrees, however, insofar as possible, to
remedy with all reasonable dispatch the causes preventing it from carrying out
its agreement; provided, however, that the settlement of strikes, lockouts and
other industrial disturbances shall be entirely within the exercise of the
reasonable discretion of the Obligor.
Section X.2 Remedies upon Event of Default. Whenever any Event of
Default shall have occurred and be continuing, the Issuer, with the consent of
the Trustee, or the Trustee acting alone, shall have and may exercise any one or
more of the following remedial powers:
(a) If the principal of and interest accrued on the Bonds
shall have been declared immediately due and payable pursuant to the Indenture,
to declare all Loan Repayments payable under Section 3.2 for the remainder of
the term of the Agreement to be immediately due and payable, whereupon the same
shall become immediately due and payable; provided, however, that, if the
Trustee shall annul any such declaration pursuant to the Indenture, the
declaration provided for in this clause (a) shall be deemed annulled;
(b) If the principal of and interest accrued on the Bonds
shall have been declared immediately due and payable pursuant to the Indenture,
to institute any actions or proceedings at law or in equity for the collection
of Loan Repayments or other sums due and unpaid under the Agreement, to
prosecute any such action or proceeding to judgment or final decree, and to
enforce any such judgment or final decree and collect in the manner provided by
law any moneys adjudged or decreed to be payable; and
(c) In case there shall be pending proceedings for the
bankruptcy or for the reorganization of the Obligor under the federal bankruptcy
laws or any other applicable law, or in case a receiver or trustee shall have
been appointed for the property of the Obligor, to file and prove a claim or
claims for the whole amount owing under the Agreement plus interest owing and
unpaid in respect thereof and, in case of any judicial proceedings, to file such
proofs of claim and other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee allowed in such judicial proceedings
relative to the Obligor, its creditors, or its property, and to collect and
receive any moneys or other property payable or deliverable on any such claims,
and to distribute the same after the deduction of its charges and expenses.
In case the Trustee or the Issuer shall have proceeded to exercise or
enforce any right or remedy under the Agreement and such proceeding shall have
been discontinued or abandoned for any reason, or shall have been determined
adversely, then and in every such case, the Obligor, the Issuer and the Trustee
shall be restored to their respective rights and positions hereunder and all
rights and remedies of the Obligor, the Issuer and the Trustee shall continue as
though no such proceeding had been taken, but subject to the limitations of any
such adverse determination.
Any amounts collected pursuant to action taken under this Section shall
be paid into the Bond Fund and applied in accordance with the Indenture, except
amounts collected pursuant to Article V for the benefit of the Issuer or the
Issuer's Agents, which shall be paid to and retained by the Issuer.
Section X.3 Payment of Attorneys' Fees and Other Expenses. In the event
the Obligor should default under any of the provisions of the Agreement and the
Issuer and/or the Trustee should employ attorneys or incur other expenses for
the collection of the Loan or for the enforcement of performance or observance
of any obligation of the Obligor in the Agreement or any other document related
to the issuance of and security for the Bonds, the Obligor shall on demand
therefor pay to the Issuer or the Trustee, or both, as the case may be, the
reasonable fees of such attorneys and such other reasonable expenses so
incurred.
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Section X.4 Waivers and Limitation on Waivers. By reason of the
assignment of the Issuer's rights and interest in the Agreement to the Trustee,
the Trustee shall have the power with the consent of the Bank to, and shall if
requested by the Bank, waive or release the Obligor from any Event of Default or
the performance or observance of any obligation or condition of the Obligor
under the Agreement, provided such waiver or release is not prohibited by the
Indenture and the Trustee and the Issuer receive an opinion of Counsel that such
action will not impose any pecuniary obligation or liability or adverse
consequence upon the Issuer or the Trustee and the Issuer and the Trustee shall
have each been provided such indemnification from the Obligor as the Issuer or
the Trustee shall deem necessary, and provided that, with respect to a waiver of
an Event of Default such waiver shall be limited to the particular Event of
Default so waived and shall not be deemed to waive any other Event of Default
hereunder nor a waiver of a similar Event of Default on a future occasion.
No delay or omission to exercise any right occurring upon any Event of
Default shall impair any such right or shall be construed to be a waiver
thereof, but any such right may be exercised from time to time and as often as
may be deemed expedient. In order to exercise any remedy reserved to the Issuer
or the Trustee in this Agreement, it shall not be necessary to give any notice
other than such notice as may be herein expressly required. Notwithstanding
anything to the contrary contained herein, the Obligor does not waive any
statute of limitations under applicable law.
ARTICLE XI
OBLIGATIONS OF OBLIGOR UNCONDITIONAL
Section XI.1 Obligor Obligations. The obligation of the Obligor to make
Loan Repayments and the payments required by Article V hereof and to perform its
other covenants hereunder shall be absolute and unconditional and shall not be
subject to any diminution by right of set-off, counterclaim, recoupment or
otherwise. During the term hereof, the Obligor (i) shall not suspend or
discontinue its Loan Repayments, (ii) shall perform and observe all of its other
obligations contained herein and (iii) except as explicitly permitted herein,
shall not terminate the Agreement for any cause including, without limiting the
generality of the foregoing, defect in title to the Project, failure to complete
the Project, any acts or circumstances that may constitute failure of
consideration, eviction or constructive eviction, destruction or damage to or
condemnation of the Project, commercial frustration of purpose, any change in
the tax or other law by the United States of America or the State or any
political subdivision of either, or any failure of the Issuer to perform and
observe any obligation or condition arising out of or connected with the
Agreement. This shall not be construed to release the Issuer from the
performance of any of its obligations under the Agreement; and in the event the
Issuer shall fail to perform any such obligation, the Obligor may institute such
action against the Issuer as the Obligor may deem necessary to compel
performance; provided, however, that no such action shall violate this Section
or diminish Loan Repayments. The Obligor may at its own cost and expense and in
its own name or in the name of the Issuer, prosecute or defend any action or
proceedings or take any other action involving third persons which the Obligor
deems reasonably necessary in order to secure or protect its rights under the
Agreement, and in such event the Issuer shall cooperate fully with the Obligor.
ARTICLE XII
MISCELLANEOUS
Section XII.1 Amounts Remaining in Funds. Any amounts remaining in the
Bond Fund, the Purchase Fund or the Project Fund upon expiration or sooner
termination of the Agreement as herein provided, after payment in full of the
Bonds (or provision therefor) in accordance with the Indenture, and all other
costs and expenses of the Obligor specified under Article V, and all amounts
owing the Issuer, the Trustee, the Bank, and the Remarketing Agent under the
Agreement, the Indenture and the Reimbursement Agreement, shall be paid to the
Obligor.
Section XII.2 Obligor Bound by Indenture. The Obligor, by execution of
this Agreement, acknowledges and agrees that it has participated in the drafting
of the Indenture and agrees that it has approved the Indenture and agrees that
it is bound by and shall have the rights set forth by the terms and conditions
thereof and covenants and agrees to perform all obligations required of the
Obligor pursuant to the terms of the Indenture.
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Section XII.3 Consents Under the Agreement. Unless otherwise expressly
provided herein, all consents permitted or required to be given under the
Agreement by the Issuer or the Trustee shall be reasonable and shall not be
unreasonably withheld or delayed.
Section XII.4 Notices. All notices, certificates or other
communications hereunder shall be sufficiently given and shall be deemed given
on the date shown as delivered when mailed by registered or certified mail,
postage prepaid, return receipt requested, addressed to the Issuer, the Obligor,
the Bank, the Remarketing Agent or the Trustee, as the case may be, at the
Issuer's Address, the Obligor's Address, the Bank's Address, the Remarketing
Agent's Address or the Trustee's Address, respectively, or hand delivered to the
above at their respective addresses. A duplicate copy of each such notice,
certificate or other communication given hereunder to the Issuer, the Obligor,
the Bank, the Remarketing Agent or the Trustee shall also be given to the
others.
The Issuer, the Obligor, the Bank, the Remarketing Agent and the
Trustee may, by written notice to the other parties, designate any further or
different addresses to which subsequent notices, certificates or communications
shall be sent.
Section XII.5 Amendment. The Agreement may be amended only as provided
in the Indenture, and no amendment to the Agreement shall be binding upon either
party hereto until such amendment is reduced to writing and executed by the
parties hereto.
Section XII.6 Binding Effect. The Agreement shall be binding upon the
parties hereto and upon its respective successors and assigns, and the words
"Issuer" and "Obligor" shall include the parties hereto and their respective
successors and assigns and include any gender, singular and plural, any
individuals, partnerships, limited liability companies or corporations.
Section XII.7 Severability. If any clause, provision or section of the
Agreement be ruled invalid or unenforceable by any court of competent
jurisdiction, the invalidity or unenforceability of such clause, provision or
section shall not affect any of the remaining clauses, provisions or sections.
Section XII.8 Execution in Counterparts. The Agreement may be executed
in several counterparts, each of which shall be an original and all of which
shall constitute but one and the same instrument.
Section XII.9 Captions and Table of Contents. The captions or headings
and the Table of Contents in the Agreement are for convenience only and in no
way define, limit or describe the scope or intent of any provisions of the
Agreement.
Section XII.10 Applicable Law. The Agreement shall be governed in all
respects, whether as to validity, construction, performance or otherwise, by the
laws of the State.
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IN WITNESS WHEREOF, the parties hereto have caused the Agreement to be
duly executed as of the day and year first above written.
MICHIGAN STRATEGIC FUND
(Issuer)
By:____________________________
Its: Authorized Officer
AUTOCAM CORPORATION
(Obligor)
By:____________________________
Its: Chief Financial Officer
E-110
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EXHIBIT APROJECT DESCRIPTION
The Project consists of the acquisition of land, the construction of an
approximately 56,000 square foot manufacturing facility and the acquisition and
installation of machinery and equipment in the City of ▇▇▇▇▇▇▇▇, County of
▇▇▇▇▇▇▇, Michigan.
E-111
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EXHIBIT B
REQUISITION CERTIFICATE
TO: Norwest Bank Wisconsin, N.A., as Trustee
FROM: Autocam Corporation (the "Obligor")
SUBJECT: $9,000,000 Michigan Strategic Fund Variable Rate Demand
Limited Obligation Revenue Bonds, Series 1997
(Autocam Corporation Project)
This represents Requisition Certificate No. ________ in the total
amount of $___________ to pay those costs of the Project detailed in the
schedule attached.
The undersigned does certify that:
1. The expenditures for which moneys are requisitioned hereby
represent proper charges against the Project Fund of the
subject bond issue, have not been included in a previous
requisition and have been properly recorded on the Obligor's
books.
2. The moneys requisitioned hereby are not greater than those
necessary to meet obligations due and payable or to reimburse
the Obligor for its funds actually advanced for costs of the
Project and do not represent a reimbursement to the Obligor
for working capital.
3. The Obligor is not in default under the Agreement and nothing
has occurred to the knowledge of the Obligor that would
prevent the performance of its obligations under the
Agreement.
4. In the event moneys in the Project Fund after payment of
moneys herein requested are insufficient to pay Project Costs,
the Obligor will pay such additional Project Costs as are
incurred from such other funds which are available for such
purpose.
5. All of the property acquired with the moneys hereby requested
will be owned by the Obligor.
6. The sum of (A) moneys requisitioned hereby to pay (or
reimburse the Obligor of its prior payment of) issuance costs
of the Bonds (within the meaning of Section 147(g) of the
Internal Revenue Code of 1986, as amended), plus (B) the total
moneys previously disbursed from the Project Fund and
similarly applied, does not exceed $180,000 (which is 2% of
the face amount of the Bonds).
▇-▇▇▇
▇▇
▇. Delivered herewith are the following requested certificates,
sworn statements, waivers of lien, surveys, invoices,
architect's certificates and other documents:
Executed this _______ day of ____________, 199____.
AUTOCAM CORPORATION,
(Obligor)
By:_______________________________________
Authorized Obligor Representative
Approved By:
COMERICA BANK, as Issuer of the Credit Facility
By:________________________________________
Its:_______________________________________
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SCHEDULE TO REQUISITION CERTIFICATE NO. ______________
Payee and Address Description of Property or Services Provided Amount
----------------- -------------------------------------------- ------
E-114
28
EXHIBIT C
COMPLETION CERTIFICATE
TO: Michigan Strategic Fund (the "Issuer"),
Comerica Bank (the "Bank") and
Norwest Bank Wisconsin, N.A., as Trustee (the "Trustee")
FROM: Autocam Corporation (the "Obligor")
SUBJECT: $9,000,000 Michigan Strategic Fund Variable Rate Demand
Limited Obligation Revenue Bonds, Series 1997
(Autocam Corporation Project)
The undersigned does hereby certify:
1. The Project has been completed in accordance with the Plans
and in such manner as to conform with all applicable zoning,
planning and building regulations of the governmental
authorities having jurisdiction of the Project, as of the date
of this Certificate (the "Completion Date").
2. The Costs of the Project have been paid in full except for
those not yet due and payable, which are described below and
for which moneys for payment thereof are being held in the
Project Fund:
(a) Cost of the Project not yet due and payable:
Description Amount
$__________
TOTAL $_____________
(b) Payments being contested:
Description Amount
TOTAL $_____________
3. The moneys in the Project Fund in excess of the totals set
forth in 2(a) and (b) above represent Surplus Bond Proceeds
and the Trustee is hereby authorized and directed to apply
such moneys pursuant to Section 4.4 of the Agreement.
4. No Event of Default has occurred under the Agreement or the
Reimbursement Agreement nor has any event occurred which with
the giving of notice or lapse of time or both shall become
such an Event of Default. Nothing has occurred to the
knowledge of the Obligor that would prevent the performance of
its obligations under the Agreement or the Reimbursement
Agreement.
This certificate is given without prejudice to any rights against third
parties which exist at the date hereof or which may subsequently come into
being.
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Capitalized terms used herein have the meanings given them in the Trust
Indenture for the Bonds.
Executed this ______ day of ___________________, 19____
AUTOCAM CORPORATION
(Obligor)
By:______________________________________
Authorized Obligor Representative
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EXHIBIT D
NO ACT OF BANKRUPTCY CERTIFICATE
TO: Comerica Bank, as issuer of the Credit Facility (the "Bank")
and Norwest Bank Wisconsin, N.A., as Trustee (the "Trustee")
FROM: Autocam Corporation (the "Obligor")
SUBJECT: $9,000,000 Michigan Strategic Fund Variable Rate Demand
Limited Obligation Revenue Bonds, Series 1997
(Autocam Corporation Project)
The undersigned does hereby certify to the Trustee and the Bank that,
during and prior to the period beginning _____________________________ and
continuing until the date hereof, no Act of Bankruptcy (as defined in that
certain Loan Agreement, dated as of December 1, 1997, between the undersigned
and the Michigan Strategic Fund) shall have occurred.
The Obligor acknowledges that the Trustee and the Bank may conclusively
rely on this Certificate.
Under penalties of perjury, this certificate has been executed this
_____ day of __________________, 19______, by the Obligor.
AUTOCAM CORPORATION
(Obligor)
By:_______________________________________
Authorized Obligor Representative
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31
EXHIBIT E
PRIOR ISSUE CERTIFICATE
(To be attached as an addendum to any
sale, assignment, or lease of the Project)
The undersigned hereby executes this Prior Issue Certificate for the
purposes of enabling Autocam Corporation, a Michigan corporation (the
"Obligor"), as obligor on an issue of $9,000,000 Michigan Strategic Fund
Variable Rate Demand Limited Obligation Revenue Bonds, Series 1997 (Autocam
Corporation Project) (the "Bonds"), to comply with a provision of a Loan
Agreement, dated as of December 1, 1997 (the "Agreement"), by and between the
Obligor and the Michigan Strategic Fund, such provision being intended to
prevent the loss of the exclusion from gross income for Federal income tax
purposes of the interest on the Bonds by reason of Code Section 144. The
undersigned undertakes and confirms that the Obligor is relying upon the
information and representations contained herein, and that such information and
representations are correct and complete. Failure to supply the correct
information on this Certificate, notwithstanding anything in the Loan Agreement
to the contrary, constitutes a breach of the Loan Agreement.
The undersigned hereby certifies that the face amount of all
outstanding tax-exempt facility-related bonds ("IDBs") allocated to the
undersigned at the time the Bonds were issued pursuant to Code ss. 144(a)(10)
was $______________. This is an amount which bears the same relationship to the
face amount of the outstanding tax-exempt IDBs as the portion of the facilities
financed by such IDBs used by the undersigned bears to all such facilities
financed, or as the portion of the facilities owned by the undersigned bears to
all such financed facilities.
The undersigned hereby certifies that the face amount of the Bonds
allocated to the undersigned, based upon the percentage of use or the percentage
of ownership or use by the undersigned in the Bond-financed facility, is
$______________________.
The undersigned does hereby certify that he or she is a duly authorized
officer of the proposed _____________________________, as indicated under his or
her signature, and that he or she has been authorized to furnish the information
and representations contained herein for use by the Obligor.
__________________________________________
(Purchaser, Lessee, Sublessee, or Assignee)
By:_____________________________
Dated:_________________________ Its:____________________________
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32
REIMBURSEMENT AGREEMENT
BETWEEN
COMERICA BANK
AND
AUTOCAM CORPORATION
Relating to:
$9,000,000 Michigan Strategic Fund,
Variable Rate Demand Limited Obligation Revenue Bonds
(Autocam Corporation Project), Series 1997
Dated as of December 1, 1997
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33
TABLE OF CONTENTS
Page
SECTION 1. Reimbursement and Other Payments -1-
SECTION 2. Issuance of Letter of Credit -3-
SECTION 3. Conditions Precedent to the Issuance of the Letter of Credit -4-
SECTION 4. Obligations Absolute -6-
SECTION 5. Representations and Warranties -6-
SECTION 6. Affirmative Covenants -9-
SECTION 7. Negative Covenants of the Obligor -11-
SECTION 8. Events of Default -11-
SECTION 9. Collateral Security -12-
SECTION 10. Amendments, Waivers, Etc -12-
SECTION 11. Addresses for Notices -12-
SECTION 12. No Waiver; Remedies -13-
SECTION 13. Indemnification -13-
SECTION 14. Continuing Obligation -14-
SECTION 15. Transfer of Letter of Credit -14-
SECTION 16. Liability of the Bank -14-
SECTION 17. Costs, Expenses and Taxes -15-
SECTION 18. Disbursements -15-
SECTION 19. Insurance -16-
SECTION 20. Condemnation -17-
SECTION 21. Severability -17-
SECTION 22. Governing Law -17-
SECTION 23. Authorized Signers -17-
SECTION 24. Headings -17-
SECTION 25. Waiver of Jury Trial -17-
EXHIBIT A IRREVOCABLE LETTER OF CREDIT A-1
EXHIBIT B AMORTIZATION SCHEDULE B-1
EXHIBIT C REDEMPTION NOTICE ▇-▇
▇-▇▇▇
▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇ AGREEMENT
REIMBURSEMENT AGREEMENT (the "Agreement"), dated as of December 1, 1997 (the
"Execution Date") by and between Autocam Corporation, a Michigan corporation,
whose address is ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (the
"Obligor") and COMERICA BANK, a Michigan banking corporation, whose address is
1000 ▇▇▇▇▇▇ Square Plaza, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (the
"Bank").
WITNESSETH:
WHEREAS, the Obligor has requested the Michigan Strategic Fund (the
"Issuer") to finance a part of the cost of the acquisition, construction and
equipping of new production facilities (including machinery and equipment) to be
located in the L. ▇▇▇▇ ▇▇▇▇▇▇ Industrial Park in the City of ▇▇▇▇▇▇▇▇, Michigan
(the "Project"), by the issuance and sale, pursuant to a Trust Indenture, dated
as of December 1, 1997 (the "Indenture"), naming Norwest Bank Wisconsin, N.A. as
trustee (the "Trustee"), of $9,000,000 principal amount of the Issuer's Variable
Rate Demand Limited Obligation Revenue Bonds, Series 1997 (Autocam Corporation
Project) (the "Bonds") to the purchaser or purchasers thereof (the "Bond
Purchasers"); and
WHEREAS, in order to induce the Bond Purchasers to purchase the Bonds, the
Obligor has requested that the Bank issue an irrevocable letter of credit (such
letter of credit and any successor letter of credit as described in Section 2 of
this Agreement being herein called the "Letter of Credit"), in an amount not to
exceed $9,138,082.19 (such amount being herein called the "Letter of Credit
Amount") to secure payment of the principal of, purchase price of, and interest
on, the Bonds.
NOW, THEREFORE, in consideration of the premises, the Obligor and the Bank
hereby agree as follows:
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35
SECTION 1. Reimbursement and Other Payments.
(a) The Obligor hereby agrees with the Bank as follows: (i) to pay the
Bank, following payment by the Bank of any draft presented under a
Letter of Credit other than a "Purchase Draft" (as defined in the
Letter of Credit), and on the same day on which such draft is so paid,
a sum (and interest on such sum as provided in clause (iii) below)
equal to the amount so paid under the Letter of Credit plus any and all
reasonable charges and expenses which the Bank may pay or incur
relative to such Letter of Credit; (ii) to pay the Bank, following
payment by the Bank of a Purchase Draft, and on the same day on which a
Purchase Draft is paid, an amount equal to the accrued interest paid by
such payment, plus sums from time to time in installments sufficient to
maintain the amortization schedule for the Bonds, which schedule is
attached hereto as Exhibit B, together with interest on such moneys
outstanding at a fluctuating interest rate per annum (computed on the
basis of a 360 day year for the actual number of days elapsed) as shall
be in effect from time to time, which rate per annum shall be equal to
the rate publicly announced by the Bank as its "Prime Rate" (the "Prime
Rate"), but such interest rate shall in no event be higher than the
maximum rate permitted by law, which interest shall be payable monthly;
and (iii) to pay the Bank, interest on any and all amounts remaining
unpaid by the Obligor hereunder, other than the principal portion of a
Purchase Draft following a Purchase Draft, at any time from the date
any such amount becomes payable until payment in full, payable on
demand, at a fluctuating interest rate per annum (computed on the basis
of a 360 day year for the actual number of days elapsed) as shall be in
effect from time to time, which rate per annum shall be equal to three
percent (3%) above its Prime Rate, provided that such fluctuating
interest rate shall in no event be higher than the maximum rate
permitted by law and, in addition, upon demand by the Bank any and all
reasonable expenses including but not limited to legal expenses
incurred by the Bank in enforcing any rights under this Agreement or
any other collateral agreement entered into in conjunction herewith.
(b) In addition, the Obligor hereby agrees to pay to the Bank a commission
with respect to the Letter of Credit, computed (on the basis of a year
of 360 days for the actual number of days elapsed) at the rate of
five-eighths percent (5/8%) per annum on the Letter of Credit Amount
(or, in the event, and effective the date, of any reduction in the
maximum amount available under the Letter of Credit in accordance with
the terms thereof, on such smaller amount to which the maximum amount
available under the Letter of Credit may have been so reduced from time
to time) from and including the date of issuance of the Letter of
Credit to but excluding the last day a drawing is available under the
Letter of Credit (the "Expiration Date"), payable in advance in annual
installments, on the first day of December of each year until the
Expiration Date; provided, that the first installment shall be payable
on the date of issuance of the Letter of Credit for the period from and
including such date of issuance until December 1, 1998. If the
Expiration Date occurs on a day before the date to which commission has
been prepaid under this Section 1(b), the Bank agrees to repay to the
Obligor, promptly after the Expiration Date, such portion of such
commission as is allocable to the period from and including the
Expiration Date until the day to which such commission has been
prepaid; provided, that the Bank shall not be obligated to repay any
portion of such commission at any time if at the close of the Bank's
business on the Expiration Date there exists an Event of Default under
this Agreement.
(c) In addition, a $100 fee shall be payable by the Obligor at the time of
each drawing on the Letter of Credit and a fee of $1,500 shall be paid
by the Obligor upon the transfer of the Letter of Credit to a new
trustee, except for a transfer at the request of the Bank.
(d) If any change in any law or regulation or in the interpretation thereof
by any court or administrative or governmental authority charged with
the administration thereof shall either (i) impose, modify or deem
applicable any reserve, special deposit, limitation or similar
requirement against letters of credit issued by, or assets held by, or
deposits in or for the account of, the Bank or (ii) impose on the Bank
any other condition regarding this Agreement or the Letter of Credit,
and the result of any event referred to in clause (i) or (ii) above
shall be to increase the cost to the Bank of issuing or maintaining the
Letter of Credit (which increase in cost shall be determined by the
Bank's reasonable allocation of the aggregate of such cost increases
resulting from such events), then, upon demand by the Bank, the Obligor
shall immediately pay to the Bank, from time to time as specified by
the Bank, additional amounts which shall be sufficient to compensate
the Bank for such increased cost, together with interest on each such
amount from the date demanded until payment in full thereof at the rate
provided in subsection (a) above. A certificate as to such increased
cost incurred by the Bank as a result of any event mentioned in clause
(i) or (ii) above, submitted by the Bank to the Obligor, shall be
conclusive as to the amount thereof.
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(e) All payments by the Obligor to the Bank hereunder shall be made in
lawful money of the United States and in immediately available funds at
the Bank's office at the address set forth above or in another matter
acceptable to the Bank. All such payments shall be charged when due to
account at the Bank, No. 1840378044 (or any other deposit or other
account of the Obligor maintained with the Bank and designated as a
replacement therefor); provided, however, this authorization shall not
affect Obligor's obligation to pay, when due, any indebtedness
hereunder whether or not account balances are sufficient to pay amounts
due.
SECTION 2. Issuance of Letter of Credit. On or before December 31, 1997,
upon written notice from the Obligor to the Bank and subject to the satisfaction
of the conditions precedent specified in Section 3 below, the Bank will issue
the Letter of Credit in substantially the form of Exhibit A hereto, in favor of
the Trustee and expiring no later than December 16, 2000 (the "Expiration
Date"). So long as no Event of Default has occurred and is continuing, on
December 1 of each year (the "Anniversary Date"), beginning December 1, 1998,
the Expiration Date shall automatically be extended for an additional year,
unless the Bank has notified the Obligor in writing on or before such
Anniversary Date of the Bank's intention not to extend the Expiration Date. The
Bank agrees to process an amendment to the Letter of Credit extending the
Expiration Date promptly upon each extension. This procedure for the automatic
extension of the Letter of Credit shall be applicable to successive Anniversary
Dates, so long as the Letter of Credit shall not have been terminated as
provided therein; provided, however, that the Expiration Date shall not be
extended beyond December 16, 2012.
SECTION 3. Conditions Precedent to the Issuance of the Letter of Credit. The
obligation of the Bank to issue the Letter of Credit is subject to the
satisfaction of the following conditions precedent:
(a) On or before the date of issuance of the Letter of Credit, the Obligor
shall have paid to the Bank the commission payable on such date of
issuance under Section 1(b) above.
(b) On or before the date of issuance of the Letter of Credit, the Bank
shall have received the following, each dated contemporaneous with the
date of issuance of the Letter of Credit and in form and substance
satisfactory to the Bank:
(i) certified copies of resolutions of the Board of Directors of
the Obligor approving this Agreement, the form and content of
the Letter of Credit and the other matters and documents
contemplated hereby.
(ii) a certificate of the Secretary or an Assistant Secretary (or
other authorized officer or representative) of the Obligor,
certifying the names and true signatures and incumbency of the
officers of the Obligor authorized to sign this Agreement and
the other documents to be delivered by it hereunder.
(iii) a certified copy of the Articles of Incorporation of the
Obligor and a certificate of good standing for the Obligor from
each jurisdiction in which its conduct or activities require it
to be licensed to do business.
(iv) a full set of the Obligor's Bylaws duly certified by the
Secretary or an Assistant Secretary (or other authorized
officer) of the Obligor.
(v) a favorable opinion of Dickinson, Wright, Moon, ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, counsel for the Obligor, in form and substance
satisfactory to the Bank.
(vi) a favorable opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ Attorneys, P.C., as
Bond Counsel, in form and substance satisfactory to the Bank.
(vii) a favorable opinion of Miller, Canfield, Paddock and Stone,
P.L.C. as counsel for the Bank, in form and substance
satisfactory to the Bank.
(viii) an executed copy of the Indenture (or a copy thereof
certified as to authenticity by the Trustee).
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(ix) an executed copy of that certain Loan Agreement dated as of
the Execution Date between the Issuer and the Obligor (the "Loan
Agreement") (or a copy thereof certified as to authenticity by
Counsel for or an agent of the Issuer).
(x) counterpart originals of the mortgages, security agreements,
guarantees and other documents constituting the Collateral
Documents (as defined in Section 9 of this Agreement) together
with evidence of such recordings, filings of financing
statements or of other actions necessary or desirable to
establish the priority of lien in the Collateral Security (as
defined in Section 9 of this Agreement) as the Bank may require.
(xi) a copy of the preliminary Offering Circular and the final
Offering Circular (together with the documents incorporated
therein by reference, herein called the "Offering Circular") of
the Issuer relating to the Bonds.
(xii) an executed original of that certain Pledge and Security
Agreement dated as of the Execution Date between the Obligor,
the Bank and the Trustee.
(xiii) a revocable redemption notice to the Trustee with respect to
redemptions required by Section 6(c) hereof in the form of
Exhibit C hereto.
(xiv) such other documents, instruments, approvals (and, if
requested by the Bank, certified duplicates of executed copies
thereof) or opinions as the Bank may reasonably request.
(c) The following statements shall be true and correct on and as of the
date of issuance of the Letter of Credit, and the execution of this
Agreement by a duly authorized officer of the Obligor shall be a
confirmation of the following:
(i) the representations and warranties contained in Section 5 of
this Agreement are correct on and as of the date of such
issuance as though made on and as of such date; and
(ii) no event has occurred which constitutes an Event of Default
(as defined in Section 8 hereof) or which would constitute an
Event of Default but for the requirement that notice be given
or time elapse or both, nor will the issuance of the Letter of
Credit give rise to the occurrence of an Event of Default.
(d) On or before the day of the issuance of the Letter of Credit:
(i) the Issuer and the Trustee shall have duly authorized and
executed the Indenture and the Indenture shall continue to be in
full force and effect;
(ii) the Issuer and the Obligor shall have duly authorized and
executed the Loan Agreement and the Loan Agreement shall
continue to be in full force and effect;
(iii) the Obligor, or any other entity or person required to
deliver the same, shall have duly authorized and executed the
Collateral Documents and the Collateral Documents shall
continue to be in full force and effect; and
(iv) the Issuer and the Underwriter shall have duly authorized and
executed the Bond Purchase Agreement (the "Bond Purchase
Agreement") relating to the Bonds, which shall continue to be in
full force and effect, and the Issuer shall have issued and
delivered the Bonds under the Bond Purchase Agreement.
SECTION 4. Obligations Absolute. The payment obligations of the Obligor
under this Agreement shall be absolute, unconditional and irrevocable, and shall
be paid strictly in accordance with the terms of this Agreement, under all
circumstances whatsoever, including, without limitation, the following
circumstances, either alleged or established:
(a) any lack of validity or enforceability of the Letter of Credit, the
Bonds, the Indenture, the Loan Agreement or any other agreement or
instrument relating thereto;
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(b) any amendment or waiver of or any consent to departure from all or any
of the foregoing;
(c) the existence of any claim, set-off, defense or other right which the
Obligor may have at any time against the Trustee, any beneficiary or
any transferee of the Letter of Credit (or any persons or entities for
whom the Trustee, any such beneficiary or any such transferee may be
acting), the Bank or any other person or entity, whether in connection
with this Agreement, the transactions contemplated herein or any
unrelated transaction;
(d) any statement or any other document presented under the Letter of
Credit proving to be erroneous, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect
whatsoever;
(e) payment by the Bank in good faith under the Letter of Credit against
presentation of a draft or certificate under circumstances where the
draft or certificate is noncomplying in one or more respects; or
(f) any other circumstance or happening whatsoever, whether or not similar
to any of the foregoing.
SECTION 5. Representations and Warranties. The Obligor represents and
warrants as of the Execution Date, as follows:
(a) It is a legal entity duly created, validly existing and
in good standing under the laws of the State of Michigan and is
qualified and in good standing in every jurisdiction in which its
business or activities requires qualification.
(b) The execution, delivery and performance by the Obligor of this
Agreement, the Loan Agreement, the Pledge and Security Agreement, and
the Collateral Documents, as the case may be, are within the Obligor's
legal powers, have been duly authorized by all necessary legal action,
do not contravene or violate (i) the Articles of Incorporation or
Bylaws of the Obligor, (ii) any law, order, rule or regulation
applicable to the Obligor, (iii) any contract or agreement to which the
Obligor is a party or by which it is bound and does not result in or
require the creation of any lien, security interest or other charge or
encumbrance (other than pursuant to the Collateral Documents, this
Agreement, the Indenture, the Pledge and Security Agreement or the Loan
Agreement) upon or with respect to any of its properties.
(c) All registration with, authorizations by, or approvals of any
governmental body required to be obtained by the Obligor for the
execution, delivery and performance of this Agreement, the Loan
Agreement, the Pledge and Security Agreement and the Collateral
Documents have been obtained and remain in full force and effect.
(d) This Agreement, the Loan Agreement, the Pledge and Security
Agreement, and the Collateral Documents are legal, valid and binding
obligations of the Obligor, enforceable against it in accordance with
their respective terms, except as enforceability may be subject, to the
effect of any applicable bankruptcy, insolvency, reorganization,
moratorium or similar law affecting creditors' rights generally.
(e) There is not pending or, to the knowledge of the Obligor,
threatened any action or proceeding before any court, governmental
agency or arbitrator against or affecting the Obligor which, if
determined adversely to the Obligor, would materially and adversely
affect the financial condition or operations of the Obligor, except as
previously disclosed to the Bank in writing or as set forth in the
annual financial statements of the Obligor for the fiscal year ending
June 30, 1997 and, and as to any actions and proceedings set forth in
such financial statements, there has been no materially adverse
development regarding any such action or proceedings.
(f) The financial statements referred to in Section 5(e) above fairly
present the financial position of the Obligor, as at such dates all in
accordance with generally accepted accounting principles consistently
applied, and since the dates of such statements, there has been no
material adverse change in such condition or operations.
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(g) The Obligor has not incurred any material accumulated funding
deficiency within the meaning of the Employment Retirement Income
Security Act of 1974 ("ERISA") and has not incurred any material
liability to the Pension Benefit Guaranty Corporation ("PBGC") in
connection with any employee benefit plan established or maintained by
the Obligor.
(h) The Obligor has good and marketable fee simple absolute title to
the real property upon which the Project will be constructed (the
"Premises") free from all liens and encumbrances except Permitted
Encumbrances (as defined in the Revolving Credit Loan Agreement dated
June 27, 1997, between Obligor and the Bank (the "Credit Agreement")).
(i) he Obligor is not in default in the payment of any indebtedness
for borrowed money or under the terms and provisions of any agreement
or instrument evidencing any such indebtedness.
(j) The Project has adequate rights of access to all water, sanitary
sewer and storm drain facilities and access to utilities necessary or
convenient to the full use and enjoyment of the Project are available
at the boundaries of the Premises, and if not now installed the same
shall be constructed and installed to service the Project in a timely
fashion.
(k) The Project has adequate rights of access to public ways and all
roads necessary for the full utilization of the Project for its
intended purposes have either been completed or the necessary rights of
way therefor have either been acquired by the appropriate governmental
authorities or have been dedicated to public use and accepted by said
governmental authorities, and all necessary steps have been taken by
the Obligor and said governmental authorities to assure the complete
construction and installation thereof.
(l) The Obligor acknowledges that the Bank makes no representation or
warranty as to the adequacy or accuracy of the environmental surveys
and reports that have been procured by the Obligor and presented to the
Bank in conjunction with the Project. The Obligor confirms the
indemnification of the Bank with respect to environmental matters
contained in the Collateral Documents and/or related documents or
instruments. The Bank assumes no liability whatsoever with respect to
such environmental surveys or reports.
(m) The Obligor will employ the proceeds of the Bonds solely for the
purpose of paying the costs of the Project.
(n) No representation or warranty of the Obligor contained in this
Agreement or in any of the Collateral Documents, and no statement
contained in any certificate, schedule, list, financial statement or
other instrument furnished to the Bank by or on behalf of the Obligor
contains, or will contain, any untrue statement of a material fact, or
omits, or will omit, to state a material fact necessary to make the
statements contained herein or therein not misleading in any material
respect when made.
(o) The Obligor has obtained or will obtain all licenses, permits,
authorizations, consents or approvals from each governmental authority
necessary for the operation of the Project; and all such licenses,
permits, authorizations, consents or approvals are or will be in full
force and effect.
SECTION 6. Affirmative Covenants. So long as a drawing is available under
the Letter of Credit, the Obligor will, unless the Bank gives its prior consent
in writing:
(a) Comply with Credit Agreement. Comply with all of the terms and
conditions contained in Section 7 of the Credit Agreement, which
Section 7 as it may be amended from time to time, is hereby
incorporated by reference. This reference to and incorporation of
Section 7 of the Credit Agreement shall survive termination of the
Credit Agreement and shall continue until termination of the Letter of
Credit and fulfillment of all of Obligor's obligations under this
Agreement.
(b) Certain Covenants Relating to the Project. The Obligor covenants
to:
(i) Operate the Project in accordance with applicable
lawful ordinances, rules and regulations and requirements of all
governmental authorities having jurisdiction over the Project.
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(ii) Maintain, preserve and keep the Project and the
grounds and structure, improvements and equipment appurtenant
thereto or used therewith, and each and every part and parcel
thereof, in good repair and working order, reasonable wear and
tear excepted, and in safe condition at all times.
(iii) During normal business hours, upon reasonable
notice, permit the Bank or its duly authorized agents free access
to the Project and make available for audit and inspection, at any
reasonable time, with reasonable notice, by the Bank or its duly
authorized agents, all property, equipment, books, contracts,
records and other papers relating to the Project. All inspections
shall be made to keep interference with production to the minimum
amount possible. The Obligor shall keep the books and accounts of
all operations relating to the Project at the Premises or at its
principal office as shown on the first page hereof, in accordance
with generally accepted accounting principles.
(iv) Promptly respond to any reasonable inquiry from
the Bank for information with respect to the Project, which
information may be verified by the Bank; provided, however, that
the Bank shall at all times be entitled to rely upon any
statements or representations made by the Obligor, or its
authorized representative.
(v) Within thirty (30) days of written notification
by Bank to the Obligor, the Obligor shall contribute to the
Project (but not the Project Fund itself) such funds which when
added to the remaining balance in the Project Fund (as defined in
the Indenture) and moneys available to the Obligor from the
Issuer, in the sole reasonable opinion of Bank, be sufficient to
pay in full the remaining cost of the Project.
(vi) Notify the Bank of any loss or damage to the
Project in a single occurrence exceeding $100,000 in value within
fifteen (15) days of the date the Obligor shall learn of said loss
or damage.
(vii) Keep valid and unimpaired the Collateral
Documents, and to that end execute at any future time and as often
as may be deemed necessary, on demand of the Bank, all further
instruments, assignments and other acts in due form and effect as
may be deemed proper by the Bank to the better carrying out of the
true intent and meaning of this Agreement, and especially, at
Obligor's sole cost, do all other things that may be reasonably
required by the Bank to make and keep valid the liens on, and
security interests in, the property described in the various
Collateral Documents and to maintain the priority of the said
mortgages and security interests.
(viii) Notify the Bank in writing within ten (10) days
thereof, should any mortgage or lien or any other security
instrument whatsoever, including mechanics liens, be filed against
the Premises or the Project claiming or securing an amount in
excess of $50,000 in aggregate, other than those filed pursuant to
the Collateral Documents.
(ix) Upon the request of the Bank, bond off under the
provisions of applicable law any lien or claim of lien filed for
record, or insure over or deposit with the issuer of title
insurance on the Project an amount of cash sufficient to satisfy
said lien or claim, within ten (10)days of the date of filing of
said claim, unless such lien or claim is being contested as
hereinabove permitted.
(x) Receive those advances made from the Project Fund
and hold the right to receive the same as a trust fund for the
purpose of paying the costs of the Project and apply the same
first to such payment before using any part thereof for any other
purpose.
(c) Redemption Obligations. Through optional redemption or other
means of payment permitted under the Indenture, to amortize the Bonds,
including Bonds held by the Trustee under the Pledge and Security
Agreement, on the basis required by Exhibit B hereof.
SECTION 7. Negative Covenants of the Obligor. So long as a drawing is
available under the Letter of Credit, the Obligor agrees that it will not,
without the prior written consent of the Bank:
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(a) Amendment of Indenture or Loan Agreement. Enter into or agree to
any amendment, change or modification of, or any waiver of any
provision of, the Indenture, the Loan Agreement or the Collateral
Documents.
(b) Violate Provisions of Credit Agreement. Violate any of the terms
and conditions contained in Section 8 of the Credit Agreement, which
Section 8, as it may be amended from time to time, is hereby
incorporated by reference. This reference to and incorporation of
Section 8 of the Credit Agreement shall survive the termination of the
Credit Agreement and shall continue until termination of the Letter of
Credit and fulfillment of all of Obligor's obligations under this
Agreement.
(c) Notice of Conversion. Give notice to the Trustee of a Conversion
to a Fixed Rate (as provided in the Indenture) without the prior
written consent of the Bank, which consent will not be unreasonably
withheld.
SECTION 8. Events of Default.
(a) The occurrence of any of the following events shall be an "Event of
Default" hereunder unless waived by the Bank pursuant to Section 10
hereof:
(i) Any representation or warranty made by the Obligor pursuant
to Section 5 hereof shall prove to have been incorrect in any
material respect when made; or
(ii) The Obligor shall fail to pay when due any amount specified
in Section 1 or Section 3 hereof; or
(iii) The Obligor shall fail to perform or observe any other term,
covenant or agreement herein contained, or in any other agreement
with the Bank to which it may be a party; and such failure shall
continue for a period of thirty (30) days after written notice to
the Obligor from the Bank; or
(iv) Any material provision of this Agreement shall at any time
for any reason cease to be valid and binding on the Obligor, or
shall be declared to be null and void, or the validity or
enforceability thereof against the Obligor shall be contested by
the Obligor or any governmental agency or authority, or the
Obligor shall deny that it has any or further liability or
obligation under this Agreement; or
(v) If any of the Collateral Documents shall for any reason cease
to create valid and enforceable obligations or a perfected lien on
the property described therein, subject only to Permitted
Encumbrances; or
(vi) An Event of Default under and as defined in the Loan
Agreement, the Indenture, the Pledge and Security Agreement, the
Credit Agreement or the Collateral Documents shall have occurred
and be continuing without the same being cured or waived pursuant
to the terms thereof.
(b) If any of the Events of Default specified in subsection (a) above shall
have occurred and be continuing, in addition to the Bank's other
remedies available under the Loan Agreement, the Indenture, the Pledge
and Security Agreement, the Collateral Documents, or such other
documents executed in connection herewith, or any other remedy
available hereunder or at law or in equity, then the Bank may, at any
time and in its sole discretion, but shall not be obligated to,
terminate its commitment to issue the Letter of Credit or, if the
Letter of Credit shall have been issued, may elect to give notice to
the Trustee pursuant to the Indenture thereby requiring the Trustee to
declare the principal of all Bonds then outstanding and the interest
accrued thereon and any premium thereon and thereby owing to be
immediately due and payable.
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SECTION 9. Collateral Security. To secure full and timely performance of
the Obligor's covenants set out in this Agreement and to secure the repayment of
all other moneys owing by the Obligor to the Bank whensoever arising and whether
associated with this Agreement or otherwise, (i) the Obligor agrees to grant to
the Bank a first perfected security interest and a first mortgage in the Project
property located in Marshall, Michigan, (ii) Obligor and each subsidiary will
grant to the Bank a first perfected security interest (if not previously
provided) in all their machinery and equipment pursuant to security agreements
acceptable to the Bank, and (iii) the Obligor will pledge to the Bank any and
all of its interest in and to the trust account established by the Remarketing
Agent in connection with the issuance of the Bonds. The mortgages and security
agreements creating such rights in favor of the Bank shall be granted pursuant
to documentation satisfactory in form and substance to the Bank (and are herein
collectively with related documents called the "Collateral Documents").
SECTION 10. Amendments, Waivers, Etc. No amendments or waiver of any
provision of this Agreement nor consent to any departure by the Obligor
therefrom shall in any event be effective unless the same shall be in writing
and signed by the Bank and the Obligor, and then such amendment, waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given. No amendment, waiver or consent with respect to any
provision of this Agreement shall affect any other provision of this Agreement.
SECTION 11. Addresses for Notices. All notices and other communications
provided for hereunder shall be in writing and mailed or delivered as follows:
if to the Obligor:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
if to the Bank:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Banking
if to the Trustee:
Norwest Bank Wisconsin, N.A.
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
or as to any party or the Trustee, at such other address as shall be
designated by such party or the Trustee, as the case may be, in a written notice
to the other party and the Trustee or the parties, as the case may be. All such
notices and other communications shall, when mailed, be effective three days
after the date of deposit in the mails, addressed as aforesaid.
SECTION 12. No Waiver; Remedies. No failure on the part of the Bank to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and exclusive of any remedies
provided by law.
SECTION 13. Indemnification. The Obligor hereby indemnifies and holds the
Bank harmless from and against any and all claims, damages, losses, liabilities,
costs or expenses whatsoever which the Bank may incur (or which may be claimed
against the Bank by any person or entity whatsoever):
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(a) by reason of any untrue statement or alleged untrue statement of fact
contained in the Offering Circular or any amendment or supplement
thereto or the Preliminary Offering Circular, or the omission or
alleged omission to state therein facts necessary to make such
statements, in the light of the circumstances under which they were
made, not misleading; provided, however, that, the Obligor shall not be
required to indemnify the Bank with respect to information concerning
the Bank in Appendix A to the Offering Circular or in Appendix A to the
Preliminary Offering Circular (the "Bank Information") which is finally
determined to contain an untrue statement of a material fact or omit to
state a material fact necessary to make the statements in the Bank
Information, in the light of the circumstances under which they were
made, not misleading; or
(b) by reason of or in connection with the execution and delivery or
transfer of, or payment or failure to pay under, the Letter of Credit;
provided, however, that the Obligor shall not be required to indemnify
the Bank pursuant to this clause for any claims, damages, losses,
liabilities, costs or expenses to the extent, but only to the extent,
caused by (i) the willful misconduct or gross negligence of the Bank,
or (ii) the Bank's willful or grossly negligent failure to pay under
the Letter of Credit after the presentation to it by the Trustee of a
draft and certificates strictly complying with the terms and conditions
of the Letter of Credit.
Nothing in this Section 13 is intended, nor shall be deemed, to limit the
Obligor's reimbursement obligation contained in Section 1 hereof.
SECTION 14. Continuing Obligation. This Agreement is a continuing
obligation and shall (i) be binding upon the Obligor, its successors and
assigns, and (ii) inure to the benefit of and be binding upon and be enforceable
by the Bank and its successors, transferees and assigns; provided, however, that
the Obligor may not assign all or any part of this Agreement without the prior
written consent of the Bank. The Obligor's warranties and representations made
in Section 5 of this Agreement shall survive the delivery and performance of all
documents and agreements contemplated by this Agreement.
SECTION 15. Transfer of Letter of Credit. The Letter of Credit first issued
by the Bank pursuant to Section 2 hereof may be transferred and each successor
Letter of Credit may be successively transferred, all in accordance with the
terms of such first Letter of Credit.
SECTION 16. Liability of the Bank. The Obligor assumes all risks of the
acts or omissions of the Trustee and any beneficiary or transferee of the Letter
of Credit with respect to its use of the Letter of Credit. Neither the Bank nor
any of its officers or directors shall be liable or responsible for: (a) the use
which may be made of the Letter of Credit or for any acts or omissions of the
Trustee and any beneficiary or transferee in connection therewith; (b) the
validity, sufficiency or genuineness of documents, or of any endorsement(s)
thereof, even if such documents should in fact prove to be in any or all
respects invalid, insufficient, fraudulent or forged; (c) payment by the Bank in
good faith made against presentation of documents which do not comply fully with
the terms of the Letter of Credit; or (d) any other circumstances whatsoever in
making or failing to make payment under the Letter of Credit, except only that
the Obligor shall have a claim against the Bank, and the Bank shall be liable to
the Obligor, to the extent, but only to the extent, of any direct, as opposed to
consequential, damages suffered by the Obligor which the Obligor proves were
caused by (i) the Bank's willful misconduct or gross negligence or (ii) the
Bank's willful or grossly negligent failure to pay under the Letter of Credit
after the presentation to it by the Trustee or a successor trustee under the
Indenture of a sight draft and certificate strictly complying with the terms and
conditions of the Letter of Credit. In furtherance and not in limitation of the
foregoing, the Bank may accept documents that appear on their face to be in
order, without responsibility for further investigation, regardless of any
notice or information to the contrary. This paragraph shall not diminish or act
to exonerate the Trustee from the performance of its obligations and
responsibilities established under the Trust Indenture.
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SECTION 17. Costs, Expenses and Taxes. The Obligor agrees to pay on demand
all reasonable costs and expenses in connection with the preparation, execution,
delivery, filing, recording, and administration of this Agreement, any other
documents which may be delivered in connection with this Agreement and any
transfer of the Letter of Credit including, without limitation, the reasonable
fees and out-of-pocket expenses of counsel for the Bank, with respect thereto
and with respect to advising the Bank as to its rights and responsibilities
under this Agreement and all costs and expenses, if any, in connection with the
enforcement of this Agreement and such other documents which may be delivered in
connection with this Agreement, including, but not limited to the Collateral
Documents. In addition, the Obligor shall pay any and all stamp and other taxes
and fees payable or determined to be payable in connection with the execution,
delivery, filing and recording of this Agreement and such other documents and
agrees to save the Bank harmless from and against any and all liabilities with
respect to or resulting from any delay in paying or omission to pay such taxes
and fees.
SECTION 18. Disbursements. The Trustee shall be authorized to disburse the
proceeds of the Bonds pursuant to the terms of the Indenture upon presentation
by the Obligor of a requisition certificate conforming to the requirements
therefor set forth in the Loan Agreement and herein, including endorsement of
each requisition certificate by the Bank. The Obligor acknowledges and agrees
that the Bank shall only be required to execute requisition certificates and
thereby authorize disbursements to the Obligor upon satisfaction of the
following conditions:
(a) no Event of Default has occurred under this Agreement, the Pledge
and Security Agreement, the Credit Agreement or the Collateral
Documents and no event which with notice an/or the passage of time
would become an Event of Default under this Agreement, the Pledge and
Security Agreement, the Credit Agreement or the Collateral Documents
has occurred,
(b) the Project shall not have been materially damaged by fire or
other casualty, or if so damaged the Obligor has complied with all
insurance requirements hereunder,
(c) in the case of disbursements to finance the purchase of machinery
and equipment, the Obligor shall have complied with the Bank's usual
requirements for equipment lending, including but not limited to: (i)
approval of disbursements by Bank; and (ii) the amount of such
requisition shall not exceed 100% of the cost of such machinery and
equipment (exclusive of freight, taxes and installation),
(d) in the case of disbursements to finance the construction of
improvements to the Project real estate, the Obligor shall have
complied with the Bank's usual requirements for construction lending,
including but not limited to: (i) an ALTA Loan policy without standard
exceptions insuring the first lien interests of the Bank in the Project
real estate in the amount of $2,200,000, subject only to liens
acceptable to the Bank, with such endorsements as the Bank may require,
(ii) surveys showing the improvements situated on all such property to
be within all lot lines and set-back lines, showing all easements
(identified by recording information), showing no encroachments and
showing such other information as the Bank may request, said surveys to
be certified to the Bank and the title insurance company, (iii) an
appraisal showing a net value of the Project real estate on an "as
built" basis of at least $2,200,000 (using an appraiser and a
methodology acceptable to the Bank), (iv) the Phase I environmental
survey provided to the Bank and a Four Step Transaction Screen shall
have been reviewed and approved by the Bank's environmental risk
department, (v) submission of sworn statements and waivers of lien,
(vi) endorsement of the title policy by the title insurance company,
(vii) approval of the disbursement request by the Bank's architect as
to the work and materials in place, and (viii) such other information
as the Bank may request related thereto, all of which shall be in form
and content satisfactory to the Bank in its sole discretion.
At the time of each disbursement of the proceeds of the Bonds, the amount
of the requested disbursement of Bond proceeds together with Bond proceeds
previously advanced shall not exceed 100% of the net fair market value of the
Project real estate securing the Bank (based on the appraisal provided to and
satisfactory to the Bank), plus 100% of the cost of new machinery and equipment
acquired with the proceeds of the Bonds (the "Available Collateral
Requirement"). Each requisition shall be supported by presentation to the Bank
of such documents, instruments or opinions as the Bank may reasonably require.
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45
SECTION 19. Insurance. In the event of any loss or damage to the Project
resulting in a right accruing in favor of any party or the parties hereto for
any payment of insurance proceeds occasioned by such loss or damage, all such
payments of insurance proceeds shall be made in accordance with the terms and
conditions set forth in the Credit Agreement. If the loss or damage is
reasonably expected to result in insurance proceeds of less than $100,000, then
the Bank shall permit the Obligor to make such use thereof as the Obligor shall
direct. If such proceeds are reasonably expected to be $100,000 or more, then
they shall be used only with the prior concurrence of the Bank, which the Bank
shall provide to rebuild if insurance proceeds and other moneys are available to
pay for rebuilding or restoring the Project in full.
SECTION 20. Condemnation. In the event that by, or pursuant to, proper
authority, the Premises, or any part thereof, is taken or condemned, under power
of eminent domain exercised by any actual or quasi governmental authority or
public utility, the provisions of the mortgage relating thereto shall govern
with respect to any awards which may be made.
SECTION 21. Severability. Any provision of this Agreement which is
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or nonauthorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of such
provision in any other jurisdiction.
SECTION 22. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Michigan.
SECTION 23. Authorized Signers. The following officer of the Obligor is
authorized on behalf of the Obligor to execute and deliver to the Bank all
documents and instruments related to any amendment or extension of the Agreement
or the Letter of Credit:
Name Title Signature
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ see signature see signature
page page
SECTION 24. Headings. Section headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of
this Agreement for any other purpose.
SECTION 25. Waiver of Jury Trial. The Obligor and the Bank after consulting
with their respective legal counsel hereby irrevocably waive the right to trial
by jury with respect to any and all actions or proceedings at any time in which
the Obligor and the Bank are parties arising out of this Agreement or the other
documents referenced hereunder.
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46
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.
AUTOCAM CORPORATION
By_________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: Chief Financial Officer
COMERICA BANK
By_________________________________
Its: Vice President
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EXHIBIT A
Telex: 3772134 MNB INTL DET Comerica Bank
Swift: MNBD US 33 One Detroit Center
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Beneficiary: Date of Issue: December 23, ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, N.A.
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
Dear Sirs:
We hereby establish, at the request and for the account of Autocam
Corporation, a Michigan corporation, whose address is ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇.▇., ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (the "Obligor"), in your favor, as Trustee under the
Trust Indenture, dated as of December 1, 1997 (the "Indenture") between the
Michigan Strategic Fund (the "Issuer") and you, pursuant to which $9,000,000 in
aggregate principal amount of the Issuer's Variable Rate Demand Limited
Obligation Revenue Bonds, Series 1997 (Autocam Corporation Project) (the
"Bonds"), are being issued, our Irrevocable Letter of Credit No. _____________,
in the total amount of $9,138,082.19 (Nine Million One Hundred Thirty-Eight
Thousand Eighty-Two and 19/100 U.S. Dollars) effective immediately and expiring
on December 16, 2000 (the "Expiration Date") or earlier terminating as
hereinafter provided.
We hereby irrevocably authorize you to draw on us upon presentation of the
certificate(s) in the forms of Annex A, B and C, as appropriate, attached
hereto, as provided below:
A. One or more drawings, each an "Interest Drawing" under Annex A, with
respect to payment of interest on the Bonds, such Interest Drawing to
be in an amount not exceeding $138,082.19 [56 days interest on the
Bonds assuming an annual rate of 10% for a year of 365 days]; and
B. One or more drawings, each a "Principal Drawing" under Annex B, with
respect to payment of principal payments on the Bonds, whether by
maturity, acceleration, optional redemption, or mandatory redemption,
such Principal Drawing to be in an amount not exceeding $9,000,000; and
C. One or more drawings, each a "Purchase Drawing" under Annex C, with
respect to payment of the purchase price of the Bonds (based on a
purchase at par plus accrued interest to the date of purchase), such
Purchase Drawing to be in an amount not exceeding $9,138,082.19
[principal plus 56 days interest on the Bonds assuming an annual rate
of 10% for a year of 365 days].
The amount available for payments with respect to Interest Drawings shall
be automatically reinstated by the amount of any payment made by us of an
Interest Drawing, unless you have received notice from us that we will not
reinstate such amount, and thereupon you shall again be irrevocably authorized
to draw on us Interest Drawings in the amount and in accordance with the terms
and conditions set forth herein. This procedure for the automatic reinstatement
of the amount available with respect to Interest Drawings shall be applicable to
successive Interest Drawings, so long as this Letter of Credit shall not have
been terminated as set forth below.
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48
The amount available under this Letter of Credit shall be automatically and
immediately reduced by the amount of payment of a Principal Drawing or the
principal portion of a Purchase Drawing. The amount of such reduction in the
case of the payment of a Purchase Drawing shall be subject to reinstatement as
set forth in the next paragraph.
Reinstatement of amounts by which this Letter of Credit was reduced in
connection with drawings made by presentation of Purchase Drawings shall be
effective after you have been notified by the Bank in writing under the Pledge
and Security Agreement, dated as of December 1, 1997, by and among the Obligor,
the Bank and you (the "Pledge and Security Agreement"), that the conditions
precedent to release of the Bonds as to which the Letter of Credit is to be
reinstated (the "Bonds to be Released") have been satisfied. Prior to such
notification and release you shall not draw on the Letter of Credit with respect
to Bonds held by you under the Pledge and Security Agreement. After you have
been notified of the satisfaction of such conditions, the reinstatement of the
Letter of Credit shall be effective and irrevocable in the amount of the face
amount of the Bonds to be Released.
If we receive your Interest Drawing or Principal Drawing certificate(s) at
such office, all in strict conformity with the terms and conditions of this
Letter of Credit, we will honor the same by 11:30 a.m., Detroit time on the next
business day with respect to such Drawings presented prior to 12:00 noon Detroit
time (with respect to such Drawings presented after such time, we shall honor
the same by 11:30 a.m. on the second business day after presentation thereof) in
accordance with your payment instructions. Similarly, if we receive your
Purchase Drawing certificate at such office, in strict conformity with the terms
and conditions of this Letter of Credit, we will honor the same by 11:30 a.m.,
Detroit time on the same business day with respect to such Drawing presented
prior to 9:30 a.m., Detroit time (with respect to such Drawing presented after
such time, we will honor the same by 11:30 a.m. on the next business day after
presentation thereof) in accordance with your payment instructions. Payment
under this Letter of Credit shall be made by transfer or deposit of immediately
available funds to your account as provided in the respective certificate. We
agree that all payments made by us hereunder will be made with our own funds and
not with any funds which could be deemed to belong to the Obligor or the Issuer,
and will be made by us prior to any reimbursement thereof.
As used herein "business day" means any day other than (i) a Saturday, (ii)
a Sunday, (iii) a day on which banking institutions in the city in which your
corporate trust office (or its bond registrar, paying agent or tender agent
offices) designated for payment of the principal, interest and Purchase Price of
the Bonds is located or the principal office of the Remarketing Agent (as
defined in the Indenture) is located or the office of the undersigned at which
action is to be taken to realize moneys under the Letter of Credit are required
or authorized by law or executive order to be closed, or (iv) a day on which the
New York Stock Exchange is closed.
Presentation of any certificate (other than a certificate to instruct the
Bank to transfer this Letter of Credit) shall be deemed effected for all
purposes under this Letter of Credit upon presentation in person, or upon
receipt by the Bank of facsimile transmission, telephone number (▇▇▇) ▇▇▇-▇▇▇▇,
setting forth in full the contents of such certificate, and such original
certificate shall be deposited in the United States mail, postage prepaid, and
addressed to the Bank at the place provided herein for the presentation of
certificates, prior to the sending of such facsimile.
Upon the earliest of (i) your surrendering this Letter of Credit to us for
cancellation, (ii) there being no Outstanding Bonds (as defined in the
Indenture), (iii) the Expiration Date, (iv) our honoring Principal and Interest
Drawings for all outstanding Bonds, or (v) the fifteenth calendar day following
delivery to you of a direction under Section 801(d) of the Indenture to declare
the Bonds immediately due and payable, this Letter of Credit automatically shall
expire and terminate.
This Letter of Credit is subject to the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce,
Publication No. 500 (the "Uniform Customs"). This Letter of Credit shall be
deemed to be made under the laws of the State of Michigan, including Article 5
of the Uniform Commercial Code as now in effect in the State of Michigan, and
shall be governed by and construed in accordance with the laws of the State of
Michigan. As to any matter of conflict between the provisions of the Uniform
Customs and the laws of the State of Michigan, the Uniform Customs shall govern
this Letter of Credit.
E-135
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Notwithstanding anything in Article 48 of the Uniform Customs to the
contrary, this Letter of Credit is transferable in its entirety (but not in
part) to any transferee who has succeeded you as Trustee under the Indenture.
Each letter of credit issued upon any such transfer may be successively
transferred. Transfer of the available drawing(s) under this Letter of Credit to
such transferee shall be effected by the presentation to us of this Letter of
Credit accompanied by a certificate in the form of Annex D attached hereto. Upon
such presentation we shall forthwith transfer the same to your transferee or, if
so requested by your transferee, issue an irrevocable letter of credit to your
transferee with provisions therein consistent with this Letter of Credit.
This Letter of Credit sets forth in full our undertaking, and such
undertaking shall not in any way be modified, amended, amplified or limited by
reference to any document, instrument or agreement referred to herein, except
only the certificate(s) referred to herein; and any such reference shall not be
deemed to incorporate herein by reference any document, instrument or agreement
except for such certificate(s).
Very truly yours,
COMERICA BANK
By________________________________
Its: Vice President
E-136
50
ANNEX A
CERTIFICATE FOR INTEREST DRAWING
To: Comerica Bank
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Standby-Letter of Credit Group
The undersigned, a duly authorized officer of Norwest Bank Wisconsin N.A.,
hereby certifies as of the date hereof to you (the "Bank"), with reference to
Irrevocable Letter of Credit No. ______________ (the "Letter of Credit"), the
defined terms therein and herein used having the same meaning) issued by the
Bank in favor of the Trustee and as Trustee under the Indenture, that:
(1) It is hereby making a drawing under the Letter of Credit with respect
to a payment of interest on the Bonds, either on a scheduled interest
payment date or on a date of redemption or maturity of Bonds (whether
stated or by acceleration) in the amount of $______________, which
amount is (i) not greater than the amount available for Interest
Drawings under the Letter of Credit, (ii) was computed in accordance
with the terms and conditions of the Bonds and the Indenture, and (iii)
does not include any amount of interest on the Bonds which is included
in any other drawing presented on or prior to the date of this
Certificate.
(2) This Certificate is and is being presented to the Bank prior to 12:00
noon, Detroit time, on ______________, a date that is one business day
prior to the date on which interest on the Bonds with respect to which
the drawing is being made is due and payable under the terms of the
Bonds and the Indenture.
(3) Please pay the requested amount on ___________ (requested payment date)
in the following manner:_______________________________________.
Dated _______________ NORWEST BANK WISCONSIN, N.A.
By_________________________________
[Name and Title]
E-137
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ANNEX B
CERTIFICATE FOR PRINCIPAL DRAWING
To: Comerica Bank
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Standby-Letter of Credit Group
The undersigned, a duly authorized officer of ___________________, hereby
certifies as of the date hereof to you (the "Bank"), with reference to
Irrevocable Letter of Credit No. _____________ (the "Letter of Credit", the
defined terms therein and herein used having the same meaning) issued by the
Bank in favor of the Trustee and as Trustee under the Indenture that:
(1) It is making a drawing under the Letter of Credit with respect to a
principal payment on the Bonds, either at maturity (whether stated or
accelerated) or by mandatory or optional redemption in the amount of
$____________, which amount is (i) not greater than amounts available
to be drawn as principal under the Letter of Credit, (ii) was computed
in accordance with the terms and conditions of the Bonds and the
Indenture, and (iii) does not include any amount of principal on the
Bonds which is included in any other drawing presented on or prior to
the date of this Certificate.
(2) This Certificate is presented to the Bank prior to 12:00 noon, Detroit
time, on _____________, a date that is one business day prior to the
date on which an unpaid principal amount on the Bonds is due and
payable under the terms of the Bonds and the Indenture.
(3) We hereby authorize a reduction in the interest coverage included in
the Letter of Credit to a new total interest coverage of $_____________
[56 days interest on the Bonds assuming an annual rate of 10% for a
year of 365 days] with a new total Letter of Credit Amount of
$--------------.
(4) Please pay the requested amount on ___________ (requested payment date)
in the following manner:__________________________________________.
Dated _______________ NORWEST BANK WISCONSIN, N.A.
By_________________________________
[Name and Title]
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52
ANNEX C
CERTIFICATE FOR PURCHASE DRAWING
To: Comerica Bank
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Standby-Letter of Credit Group
The undersigned, a duly authorized officer of _________________, hereby
certifies as of the date hereof to you (the "Bank"), with reference to
Irrevocable Letter of Credit No. ________________ (the "Letter of Credit", the
defined terms therein and herein used having the same meaning) issued by the
Bank in favor of the Trustee and as Trustee under the Indenture, that:
(1) It is making a drawing under the Letter of Credit with respect to a
payment of the purchase price of Bonds being purchased by the Obligor
and pledged to the Bank pursuant to the Pledge and Security Agreement,
in the amount of $__________, representing $_________ principal amount
of the Bonds at par and $_____________ accrued interest on the Bonds to
the date of purchase, the foregoing amounts being the purchase price of
the Bonds.
(2) The undersigned or its agent received $_________ principal amount of
Bonds, being all the Bonds being purchased with the proceeds of this
Purchase Drawing, in such form as to enable the undersigned to
reregister said Bonds in the name of the Obligor.
(3) This Certificate is dated and is being presented to the Bank prior to
9:30 a.m., Detroit time, on _______________, the date on which the
purchase price on the Bonds is due and payable.
(4) Please pay the requested amount on ___________ (requested payment date)
in the following manner:____________________________________.
Dated _______________ NORWEST BANK WISCONSIN, N.A.
By_________________________________
[Name and Title]
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53
ANNEX D
CERTIFICATE FOR TRANSFER*
To: Comerica Bank
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Standby-Letter of Credit Group
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
______________________________________
[Name of Transferee]
______________________________________
[Address]
all rights of the undersigned beneficiary to draw under Irrevocable Letter of
Credit No. ____________. The undersigned represents that the transferee is the
successor to the undersigned as Trustee under the Indenture, as defined in the
Letter of Credit. By this transfer, all rights of the undersigned beneficiary in
such Letter of Credit are transferred to the transferee and the transferee shall
hereafter have the sole rights as beneficiary thereof; provided, however, that
no rights shall be deemed to have been transferred to the transferee until such
transfer complies with the requirements of such Letter of Credit pertaining to
transfers.
The Letter of Credit is returned herewith and in accordance with the
Indenture we ask you to transfer the same to the transferee or, if so requested
by the transferee, to issue a new irrevocable letter of credit in favor of the
transferee with provisions consistent with the Letter of Credit.
Very truly yours,
NORWEST BANK WISCONSIN, N.A.
By ___________________________
[Name and Title]
*This certificate may not be presented by facsimile
E-140
54
EXHIBIT B
AMORTIZATION SCHEDULE
Sufficient payments shall be made or actions taken by the Obligor so that
the principal amount of Bonds outstanding is not greater than the specified
amounts on the corresponding dates:
Dates (December 1) Outstanding
Principal Amounts
12/01/1998 $9,000,000
12/01/1999 8,615,000
12/01/2000 8,205,000
12/01/2001 7,770,000
12/01/2002 7,310,000
12/01/2003 6,820,000
12/01/2004 6,305,000
12/01/2005 5,755,000
12/01/2006 5,175,000
12/01/2007 4,560,000
12/01/2008 3,905,000
12/01/2009 3,215,000
12/01/2010 2,480,000
12/01/2011 1,700,000
12/01/2012 875,000
12/01/2013 0
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EXHIBIT C
REDEMPTION NOTICE
To: Norwest Bank Wisconsin, N.A., as Trustee
Re: $9,000,000 Michigan Strategic Fund Variable Rate Demand Limited
Obligation Revenue Bonds, Series 1997 (Autocam Corporation Project) (the
"Bonds")
Date: December 23, 1997
The undersigned, the Obligor (as defined in the Trust Indenture, dated as
of December 1, 1997, pursuant to which the Bonds were issued (the "Indenture"))
hereby gives notice of redemption to you as Trustee with respect to the Bonds
pursuant to Section 401 of the Indenture. You are hereby directed to redeem the
Bonds in the following amounts on the following dates (or on the first Business
Day thereafter, if such dates are not in any case Business Days) in accordance
with the provisions of the Indenture:
Dates (December 1) Amounts
12/01/1998 $385,000
12/01/1999 410,000
12/01/2000 435,000
12/01/2001 460,000
12/01/2002 490,000
12/01/2003 515,000
12/01/2004 550,000
12/01/2005 580,000
12/01/2006 615,000
12/01/2007 655,000
12/01/2008 690,000
12/01/2009 735,000
12/01/2010 780,000
12/01/2011 825,000
12/01/2012 875,000
This notice may only be revoked at the written direction of the
undersigned, with the written concurrence of Comerica Bank and shall be of no
further force and effect on and after the Conversion Date (as defined in the
Indenture).
AUTOCAM CORPORATION
By_________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: Chief Financial Officer
The Above Notice is Hereby Accepted:
NORWEST BANK WISCONSIN, N.A., as Trustee
By_______________________________________
Its Authorized Officer
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56
PLEDGE AND SECURITY AGREEMENT
PLEDGE AND SECURITY AGREEMENT, dated as of December 1, 1997, made by Autocam
Corporation, a Michigan corporation (the "Pledgor"), Norwest Bank Wisconsin,
N.A., which is Trustee under the Indenture (as hereinafter defined) and as
custodian hereunder (the "Agent"), and Comerica Bank, a Michigan banking
corporation (the "Bank"), pursuant to the Reimbursement Agreement, dated as of
December 1, 1997, between the Pledgor and the Bank (hereinafter, as the same may
from time to time be amended or supplemented, called the "Reimbursement
Agreement"):
WITNESSETH:
WHEREAS, the Michigan Strategic Fund (the "Issuer") has agreed with the
Pledgor to issue its Variable Rate Demand Limited Obligation Revenue Bonds,
Series 1997 (Autocam Corporation Project) (the "Bonds"), under the Trust
Indenture, dated as of December 1, 1997 (the "Indenture"), between the Issuer
and the Agent, as Trustee;
WHEREAS, the Indenture requires the Pledgor under the circumstances provided
therein to purchase Bonds duly tendered for purchase by the holders thereof and
to register the Bonds so purchased in the name of the Pledgor in accordance with
the Indenture (the "Tendered Bonds");
WHEREAS, in the Indenture the Issuer and the Trustee have agreed to certain
remarketing provisions for the Bonds pursuant to which Comerica Securities or
its successor remarketing agent (the "Remarketing Agent") has agreed to the
remarketing of certain Bonds;
WHEREAS, in connection with the issuance of the Bonds, the Pledgor and
certain other persons and entities have agreed to enter into the Reimbursement
Agreement in order to cause the Bank to issue an irrevocable letter of credit in
favor of the Trustee (the "Letter of Credit") which may be used, inter alia, to
pay all or a portion of the purchase price of the Tendered Bonds in the event
the same are not remarketed prior to the date for purchase of the Tendered Bonds
(any of such Tendered Bonds so purchased from a draw under the Letter of Credit
being hereinafter referred to as the "Pledged Bonds");
WHEREAS, it is a condition precedent to the obligation of the Bank to enter
into the Reimbursement Agreement and to issue the Letter of Credit that the
Pledgor and the Agent shall have executed and delivered this Agreement to the
Bank;
NOW, THEREFORE, in consideration of the premises and in order to induce the
Bank to enter into the Reimbursement Agreement and issue the Letter of Credit
and for other good and valuable consideration, receipt of which is hereby
acknowledged, the Pledgor and Agent hereby agree with the Bank as follows:
1. Defined Terms. Unless otherwise defined herein, terms defined in the
Reimbursement Agreement shall have such defined meanings when used
herein.
2. Pledge. The Pledgor hereby pledges, assigns, hypothecates, transfers,
and delivers to the Bank or its designee all its right, title and
interest in the Pledged Bonds as the same may be from time to time
delivered to the Agent, by the holders thereof or by the Remarketing
Agent and held by the Agent as agent for the Bank, and hereby grants to
the Bank, a first lien on, and security interest in, its right, title
and interest in and to the Pledged Bonds, together with all payments of
principal, premium and interest thereon and all proceeds thereof,
including without limitation remarketing proceeds (collectively, the
"Collateral"), as collateral security for (a) the prompt and complete
payment of all amounts payable to the Bank under the Reimbursement
Agreement, (b) performance and observance of all covenants, terms and
conditions upon which the Letter of Credit is issued, including without
limitation the covenants, terms and conditions set forth in the
Reimbursement Agreement, and (c) the performance of the covenants
herein contained and any monies expended by the Bank in connection
therewith (collectively, the "Obligations").
▇-▇▇▇
▇▇
▇. Payments on the Pledged Bonds. Payments received by the Agent in
respect of the Pledged Bonds shall be held by the Agent in trust for
the benefit of the Bank, and the Agent shall pay the same forthwith to
the Bank. Upon receipt by the Bank, such amounts shall be credited
against the Obligations to the Bank.
4. Release of Pledged Bonds. Upon reinstatement of the amount available
under the Letter of Credit to be drawn as a Purchase Draft following
payment by the Bank of a Purchase Draft under such Letter of Credit
(which would occur following repayment to the Bank of all amounts owed
by the Pledgor to the Bank in connection with payment by the Bank of
such Purchase Draft or upon satisfaction of such other requirements as
may be agreed to by Pledgor and the Bank), the Agent automatically
shall release and deliver to the Pledgor or its designee Pledged Bonds
(of the Bonds secured by such Letter of Credit) in a principal amount
up to but not exceeding the amount by which the stated amount of the
applicable Letter of Credit shall have been so increased; provided,
however, that in any event, if all existing and future liabilities and
obligations of Pledgor to the Bank under the Reimbursement Agreement
are fully paid and fully secured, all Pledged Bonds shall be released
and delivered to the Pledgor or its designee. The foregoing
notwithstanding, all Pledged Bonds shall be released and delivered to
the Trustee for cancellation at redemption or maturity.
5. Rights of the Bank. The Bank shall not be liable for failure to collect
the Obligations or for failure to realize upon any collateral security
or guarantee therefor, or any part thereof, or for any delay in so
doing nor shall the Bank be under any obligation to take any action
whatsoever with regard thereto. If an Event of Default under the
Reimbursement Agreement has occurred and is continuing, the Bank may
thereafter without notice exercise all rights, privileges or options
pertaining to any Pledged Bonds as if it were the absolute owner
thereof, upon such terms and conditions as it may determine, including,
without limitation, the right to direct the agent as Trustee to cancel
said Pledged Bond under the Indenture, all without liability except to
account for property actually received by it, but the Bank shall have
no duty to exercise any of the aforesaid rights, privileges or options
and shall not be responsible for any failure to do so or delay in so
doing.
6. Remedies. In the event that any portion of the Obligations has been
declared due and payable, the Bank, without demand of performance or
other demand, advertisement or notice of any kind (except the notice
specified below of time and place of public or private sale) to or upon
the Pledgor or any other person (all and each of which demands,
advertisements and notices are hereby expressly waived), may forthwith
collect, receive, appropriate and realize upon the Collateral, or any
part thereof, and may forthwith sell, assign, give option or options to
purchase, contract to sell or otherwise dispose of and deliver said
Collateral, or any part thereof, in one or more parcels at public or
private sale or sales, at any exchange, broker's board or at any of the
Bank's offices, or elsewhere upon such terms and conditions as it may
deem advisable and at such prices as it may deem best, for cash or on
credit or for future delivery without assumption of any credit risk,
with the right to the Bank, upon any such sale or sales, public or
private, to purchase the whole or any part of said Collateral so sold,
free of any right or equity of redemption in the Pledgor, which right
or equity is hereby expressly waived or released. The Bank shall apply
the net proceeds of any such collection, recovery, receipt,
appropriation, realization or sale, after deducting all reasonable
costs and expenses of every kind incurred therein or incidental to the
care, safekeeping or otherwise of any and all of the Collateral or in
any way relating to the rights of the Bank hereunder, including
reasonable attorney's fees and legal expenses, to the payment in whole
or in part of the Obligations in such order as the Bank may elect, the
Pledgor remaining liable for any deficiency remaining unpaid after such
application, and only after so paying over such net proceeds and after
the payment by the Bank of any other amount required by any provision
of law, including, without limitation, Section 9504(1)(c) of the
Uniform Commercial Code of the State of Michigan, and after expiration
of the Letter of Credit, need the Bank account for the surplus, if any,
to the Pledgor. The Bank agrees to give the Pledgor, the Agent and the
Issuer not less than ten days' written notice of the time and place of
any public sale and of the time after which a private sale or other
intended disposition is to take place. The Pledgor agrees that such
notice is reasonable notification of such matters. No notification need
be given to the Pledgor if it has signed after default a statement
renouncing or modifying any right to notification of sale or other
intended disposition. In addition to the rights and remedies granted to
it in this Agreement and in any other instrument or agreement securing,
evidencing or relating to any of the Obligations, the Bank shall have
all the rights and remedies of a secured party under the Uniform
Commercial Code of the State of Michigan. The Pledgor further agrees to
waive and agrees not to assert any rights or privileges which it may
acquire under Section 9112 of the Uniform Commercial Code and the
Pledgor shall be liable for the deficiency if the proceeds of any sale
or other disposition of the Collateral are insufficient to pay all
amounts to which the Bank is entitled, and the fees of any attorneys
employed by the Bank to collect such deficiency.
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58
7. Representations, Warranties and Covenants of the Pledgor. The Pledgor
represents and warrants that: (a) on the date of delivery to the Bank
or its designee of any Pledged Bonds in accordance with Section 2
hereof, neither the Issuer, the Remarketing Agent nor the Agent will
have any right, title or interest in and to the Pledged Bonds; (b) it
has, and on the date of delivery to the Bank or its designee of any
Pledged Bonds will have, full power, authority and legal right to
pledge all of its right, title and interest in and to the Pledged Bonds
pursuant to this Agreement; (c) this Agreement has been duly
authorized, executed and delivered by the Pledgor and constitutes a
legal, valid and binding obligation of the Pledgor enforceable in
accordance with its terms; (d) no consent of any other party
(including, without limitation, any creditors of the Pledgor) and no
consent, license, permit, approval or authorization of exemption by,
notice or report to, or registration, filing or declaration with, any
governmental authority, domestic or foreign, is required to be obtained
by the Pledgor in connection with the execution, delivery or
performance of this Agreement; (e) the execution, delivery and
performance of this Agreement will not violate any provision of any
applicable law or regulation or of any order, judgment, writ, award or
decree of any court, arbitrator or governmental authority, domestic or
foreign, or of the charter documents of the Pledgor or of any
securities issued by the Pledgor, or of any mortgage, indenture, lease,
contract, or other agreement, instrument or undertaking to which the
Pledgor is a party or which purports to be binding upon the Pledgor or
upon any of its assets and will not result in the creation or
imposition of any lien, charge or encumbrance on or security interest
in any of the assets of the Pledgor except as contemplated by this
Agreement; and (f) the pledge, assignment and delivery of such Pledged
Bonds pursuant to this Agreement will create a valid first lien on, and
a first perfected security interest in, all right, title or interest of
the Pledgor in or to such Pledged Bonds, and the proceeds thereof,
subject to no prior pledge, lien, mortgage, hypothecation, security
interest, charge, option or encumbrance or to any agreement purporting
to grant to any third party a security interest in the property or
assets of the Pledgor which would include the Pledged Bonds. The
Pledgor covenants and agrees that it will defend the Bank's right,
title and security interest in and to the Pledged Bonds and the
proceeds thereof against the claims and demands of all persons
whomsoever; and covenants and agrees that it will have like title to
and right to pledge any other property at any time hereafter pledged to
the Bank as Collateral hereunder and will likewise defend the Bank's
right thereto and security interest therein.
8. No Disposition, etc. Except as otherwise provided in the Remarketing
Agreement with respect to Pledged Bonds sold to or by the Remarketing
Agent, the Pledgor agrees that it will not, without the prior written
consent of the Bank sell, assign, transfer, exchange, or otherwise
dispose of, or grant any option with respect to, the Collateral, nor
will it create, incur or permit to exist any pledge, lien, mortgage,
hypothecation, security interest, charge, option or any other
encumbrance with respect to any of the Collateral, or any interest
therein, or any proceeds thereof, except for the lien and security
interest provided for by this Agreement.
9. Sale of Collateral. (a) The Pledgor recognizes that the Bank may be
unable to effect a public sale of any or all of the ledged Bonds by
reason of certain prohibitions contained in the Securities Act of 1933,
as amended, and applicable state securities laws, but may be compelled
to resort to one or more private sales thereof to a restricted group of
purchasers who will be obliged to agree, among other things, to acquire
such securities for their own account for investment and not with a
view to the distribution or resale thereof. The Pledgor acknowledges
and agrees that any such private sale may result in prices and other
terms less favorable to the seller than if such sale were a public sale
and, notwithstanding such circumstances, agrees that any such private
sale shall be deemed to have been made in a commercially reasonable
manner. The Bank shall be under no obligation to delay a sale of any of
the Pledged Bonds for the period of time necessary to permit the issuer
of such securities to register such securities for public sale under
the Securities Act, or under applicable state securities laws, even if
the issuer would agree to do so.
(b) The Pledgor further agrees to do or cause to be done all such other
acts and things as may be necessary to make such sale or sales of any
portion or all of the Pledged Bonds valid and binding and in compliance
with any and all applicable laws, regulations, orders, writs,
injunctions, decrees or awards of any and all courts, arbitrators or
governmental instrumentalities, domestic or foreign, having
jurisdiction over any such sale or sales, all at the Pledgor's expense.
▇-▇▇▇
▇▇
▇▇. Further Assurances. The Pledgor agrees that at any time and from time
to time upon the written request of the Bank, it will execute and
deliver such further documents and do such further acts and things as
the Bank may reasonably request in order to effect the purposes of this
Agreement.
11. Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
12. No Waiver; Cumulative Remedies. The Bank shall not by any act, delay,
omission or otherwise be deemed to have waived any of its rights or
remedies hereunder and no waiver shall be valid unless in writing,
signed by the Bank, and then only to the extent therein set forth. A
waiver by the Bank of any right or remedy hereunder on any one occasion
shall not be construed as a bar to any right or remedy which the Bank
would otherwise have on any future occasion. No failure to exercise nor
any delay in exercising on the part of the Bank, any right, power or
privilege hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein
provided are cumulative and may be exercised singly or concurrently,
and are not exclusive of any rights or remedies provided by law.
13. Waivers, Amendments; Applicable Law. None of the terms or provisions of
this Agreement may be waived, altered, modified or amended except by an
instrument in writing, duly executed by all parties hereto. This
Agreement and all obligations of the Pledgor hereunder shall be binding
upon the successors and assigns of the Pledgor, and shall, together
with the rights and remedies of the Bank hereunder, inure to the
benefit of the Bank and its successors and assigns. This Agreement
shall be governed by, and be construed and interpreted in accordance
with, the laws of the State of Michigan.
14. Fees and Expenses. Pledgor agrees to pay and reimburse the Agent and
the Bank for and indemnify and hold them harmless against all costs,
expenses, taxes and fees (including reasonable attorneys' fees and
disbursements) and any liability incurred in connection with the
administration and enforcement of this Agreement. Such undertaking of
Pledgor shall survive the termination of this Agreement.
15. Termination. This Agreement shall terminate upon the expiration of the
Letter of Credit and payment in full and the performance and
satisfaction of all Obligations, and upon such termination the Bank and
the Trustee shall assign, transfer and deliver without recourse and
without warranty the Collateral to Pledgor (and any property received
in respect thereof) as has not theretofore been sold or otherwise
applied pursuant to the provisions of this Agreement.
16. Waiver. The Bank hereby agrees to waive any and all claims, liabilities
and causes of action against the Agent which may arise by reason of or
in connection with any and all of the Agent's obligations, duties and
responsibilities set forth in this Pledge Agreement, including but not
limited to holding the Pledged Bonds and any payments with respect
thereto as agent for the Bank and the release and delivery of the
Pledged Bonds to the Pledgor or its designee; provided, however, that
the Bank shall not be required to waive any claim, liability or cause
of action against the Agent to the extent, but only to the extent,
arising as a result of the willful and wrongful failure or willful and
wrongful misconduct or gross negligence of the Agent.
17. Captions/Counterparts. Captions in this Agreement are included herein
for convenience of reference only and shall not constitute a part of
this Agreement for any other purpose. This Agreement may be executed in
any number of counterparts and if so executed shall be read and
interpreted as a single agreement.
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60
IN WITNESS WHEREOF, the undersigned parties have executed and delivered
this Agreement or have caused this Agreement to be duly executed and delivered
by their duly authorized officers on the day and year first above written.
AUTOCAM CORPORATION
By: \s\ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: Chief Financial Officer
NORWEST BANK WISCONSIN, N.A.,
Trustee
By: \s\ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Corporate Trust Officer
COMERICA BANK
By: \s\ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇
Its: Vice President
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61
REMARKETING AGREEMENT
between
AUTOCAM CORPORATION
(the "Obligor")
and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & CO. INCORPORATED
(the "Remarketing Agent")
Dated as of December 1, 1997
Relating to
$9,000,000
MICHIGAN STRATEGIC FUND
Variable Rate Demand Limited Obligation
Revenue Bonds, Series 1997
(Autocam Corporation Project)
62
REMARKETING AGREEMENT
THIS REMARKETING AGREEMENT (the "Agreement") dated as of December 1, 1997
by and between AUTOCAM CORPORATION, a Michigan corporation (the "Obligor") and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & CO. INCORPORATED (the "Remarketing Agent").
WHEREAS, the Michigan Strategic Fund (the "Issuer") has appointed the
Remarketing Agent (and the Remarketing Agent hereby accepts the appointment) as
Remarketing Agent under the Trust Indenture dated as of the date of this
Agreement (the "Indenture") between the Issuer and Norwest Bank Wisconsin, N.A.,
as trustee (the "Trustee"), relating to the Issuer's $9,000,000 principal amount
Variable Rate Demand Limited Obligation Revenue Bonds, Series 1997 (Autocam
Corporation Project) (the "Bonds"); and
WHEREAS, the Obligor has entered into a Loan Agreement dated as of the date
of this Agreement (the "Loan Agreement") between the Issuer and the Obligor; and
WHEREAS, the Remarketing Agent has been appointed by the Issuer to use its
best efforts to remarket the Bonds subject to optional or mandatory purchase and
to determine the interest rate necessary to remarket the Bonds at par; and
WHEREAS, the Obligor and Remarketing Agent desire to make additional
provisions regarding the Remarketing Agent's role as Remarketing Agent for the
Bonds with respect to its obligations described in Section 203 of the Indenture.
Terms used in this Agreement without being defined have the meanings given them
in the Indenture.
NOW, THEREFORE, the Obligor and Remarketing Agent hereby agrees as follows:
Section 1. Duties.
(a) The Remarketing Agent will perform the duties specified as
Remarketing Agent under the Indenture, including, but not limited to, the
determination of interest rates as set forth in Section 110 of the Indenture and
the remarketing of the Bonds as set forth in Section 203 of the Indenture.
Unless the Remarketing Agent is otherwise directed in writing by the Obligor and
except as provided in the next paragraph, the Remarketing Agent shall use its
best efforts to remarket Bonds subject to optional or mandatory purchase under
Sections 201 and 202 of the Indenture, respectively. Bonds which are subject to
mandatory purchase on the Conversion Date, a proposed Conversion Date or a
Substitution Date shall be remarketed by the Remarketing Agent only to a buyer
to whom the Remarketing Agent has delivered, at the time of such remarketing, a
copy of the notice of conversion or notice of delivery of a Substitute Credit
Facility, as applicable, pursuant to Section 113(b) of the Indenture. In the
event the Bonds are remarketed pursuant to a mandatory purchase on the
Conversion Date, a proposed Conversion Date or a Substitution Date, the
Remarketing Agent shall be entitled to a fee (mutually agreed upon with the
Obligor prior to the commencement of the remarketing) in addition to the annual
remarketing fee received pursuant to Section 4 hereof. In acting as Remarketing
Agent, the Remarketing Agent will act as agent and not as principal except as
expressly provided in this Section 1.
(b) The Remarketing Agent may, if it determines to do so in its sole
discretion, buy as principal, but it will not in any event be obligated to do
so, and if it buys Bonds it will have the same rights as would any other person
holding the Bonds.
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63
Section 2. Disclosure Statement. If the Remarketing Agent determines
that it is necessary or desirable to use a disclosure statement in connection
with its offering of Bonds (a "Disclosure Statement"), and in any event upon
conversion of the interest rate on the Bonds to a Fixed Rate, the Remarketing
Agent will notify the Obligor and the Obligor will provide the Remarketing Agent
with a Disclosure Statement satisfactory to the Remarketing Agent and its
Counsel in respect of the Bonds. The Obligor will supply the Remarketing Agent,
at the Obligor's expense, with such number of copies of the Disclosure Statement
as the Remarketing Agent requests from time to time and will amend the document
with respect to the Obligor and any summary of documents the amendment of which
was approved by the Obligor (and/or the documents incorporated by reference in
it) so that at all times the document will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
in the document, in light of the circumstances under which they were made, not
misleading.
Section 3. Indemnification and Contribution.
(a) The Obligor will indemnify and hold harmless the Remarketing
Agent, each of its directors, officers, employees and agents and each person
who controls the Remarketing Agent within the meaning of Section 15 of the
Securities Act of 1933, as amended (such Act being herein called the "Act" and
any such person being herein sometimes called for purposes of this paragraph
(a) an "Indemnified Party"), against any and all losses, claims, damages or
liabilities, joint or several, to which such Indemnified Party may become
subject under any statute or at law or in equity or otherwise, and will
reimburse any such Indemnified Party for any legal or other expenses incurred
by it in connection with investigating any claims against it and defending any
actions, insofar as such losses, claims, damages, liabilities or actions arise
out of or are based upon any untrue statements, or alleged untrue statement, of
a material fact with respect to the Obligor contained in any Disclosure
Statement referred to in Section 2 hereof or any amendment or supplement
thereto, or any portion of the Disclosure Statement under the headings
"Introductory Statement," "The Obligor and the Use of Proceeds," "The Bonds"
(other than the information under the sub-heading "Book-Entry System"),
"Sources of Payment and Security," "The Letter of Credit," "The Loan
Agreement," "The Trust Indenture," "The Reimbursement Agreement," and "The
Pledge and Security Agreement," or the omission or alleged omission to state
therein a material fact necessary to make the statements therein with respect
to the Obligor or under such headings not misleading. This indemnity agreement
will not be construed as a limitation on any other liability which the Obligor
may otherwise have to any Indemnified Party, but in no event shall the Obligor
be obligated for double indemnification. The duty of the Obligor to indemnify
and hold the Issuer and its directors, officers, employees and agents harmless
shall be governed by Section 5.4 of the Loan Agreement, the provisions of which
are incorporated herein by this reference.
(b) The Remarketing Agent will indemnify and hold harmless the
Obligor, each of its directors, officers, partners, employees and agents and
each person who controls the Obligor within the meaning of Section 15 of
the Act (for purposes of this paragraph (b), an "Indemnified Party") to the
same extent as the foregoing indemnity in paragraph (a) from the Obligor to the
Remarketing Agent, but only with reference to written information, if any,
relating to the Remarketing Agent furnished to the Obligor by the Remarketing
Agent specifically for use in the preparation of a Disclosure Statement. This
indemnity agreement shall not be construed as a limitation on any other
liability which the Remarketing Agent may otherwise have to any Indemnified
Party, but in no event shall the Remarketing Agent be obligated for double
indemnification.
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64
(c) An Indemnified Party (as defined in paragraph (a) or paragraph
(b) of this Section 3) will, promptly after receiving notice of the
commencement of any action against such Indemnified Party in respect of which
indemnification may be sought against the Obligor or the Remarketing Agent, as
the case may be (the "Indemnifying Party"), notify the Indemnifying Party in
writing of the commencement of the action. Failure of the Indemnified Party to
give such notice will reduce the liability of the Indemnifying Party under this
Agreement by the amount of the damages attributable to the failure to give the
notice; but the failure will not relieve the Indemnifying Party from any
liability which it may have to such Indemnified Party otherwise than under the
indemnity agreement in this Section 3. If such action is brought against an
Indemnified Party and such Indemnified Party notifies the Indemnifying Party of
the commencement of the action, the Indemnifying Party may, or if so requested
by the Indemnified Party shall, participate in it or assume its defense, with
counsel reasonably satisfactory to the Indemnified Party, and after notice from
the Indemnifying Party to the Indemnified Party of an election so to assume the
defense, the Indemnifying Party will not be liable to the Indemnified Party
under this Section 3 for any legal or other expenses subsequently incurred by
such Indemnified Party in connection with the defense other than reasonable
costs of investigation. If the Indemnifying Party does not employ counsel to
take charge of the defense or if any Indemnified Party reasonably concludes
that there may be defenses available to it which are different from or in
addition to those available to the Indemnifying Party (in which case the
Indemnifying Party will not have the right to direct the defense of such action
on behalf of such Indemnified Party), legal and other expenses reasonably
incurred by such Indemnified Party will be paid by the Indemnifying Party.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in paragraph (a) of this
Section 3 is due in accordance with its terms but is for any reason held by a
court to be unavailable from the Obligor on grounds of policy or otherwise, the
Obligor and Remarketing Agent shall contribute to the total losses, claims,
damages and liabilities (including legal or other expenses reasonably incurred
in connection with investigating or defending the same) to which the Obligor and
Remarketing Agent may be subject in such proportion so that the Remarketing
Agent is responsible for that portion represented by the percentage that the fee
to be paid to the Remarketing Agent under Section 4 hereof bears to the
principal amount of the Bonds remarketed under this Agreement and the Obligor is
responsible for the balance; but (i) in no case will the Remarketing Agent be
responsible for any amount in excess of the fee applicable to the Bonds
remarketed by the Remarketing Agent under this Agreement and (ii) no person
guilty of fraudulent misrepresentation (within the meaning of section 11(f) of
the Act) will be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. For purposes of this Section 3(d), each
person who controls the Remarketing Agent within the meaning of Section 15 of
the Act will have the same rights to contribution as the Remarketing Agent and
each person who controls the Obligor within the meaning of Section 15 of the Act
and each officer, each director and each partner of the Obligor will have the
same rights to contribute as the Obligor, subject in each case to clause (i) and
(ii) of this Section 3(d). Any party entitled to contribution will, promptly
after receiving notice of commencement of any action, suit or proceeding against
such party in respect of which a claim for contribution may be made under this
Section 3(d), notify each party from whom contribution may be sought, but the
failure to notify such party shall not relieve any party from whom contribution
may be sought from any other obligation it may have under this Agreement or
otherwise than under this Section 3(d).
Section 4. Fees and Expenses. In consideration of the Remarketing Agent's
services under this Agreement, the Obligor will pay the Remarketing Agent a fee
of 1/8 of 1% of the aggregate principal amount of Bonds at closing. Thereafter,
the Obligor will pay a non-refundable fee of 1/8 of 1% per annum of the
aggregate principal amount of the Bonds outstanding payable on December 1 of
each year commencing December 1, 1998. The Obligor will also pay all expenses in
connection with the delivery of remarketed Bonds and with preparing a disclosure
document under Section 2 hereof and will reimburse the Remarketing Agent for all
of its direct out-of-pocket expenses incurred by it as Remarketing Agent or
otherwise under this Agreement, including reasonable Counsel fees and
disbursements.
Section 5. Remarketing Agent Not Liable for Failures by Purchasers of
Bonds. The Remarketing Agent will not be liable to the Obligor on account of the
failure of any person to whom the Remarketing Agent has sold a Bond to pay for
it or to deliver any document in respect of the sale.
Section 6. Representations and Warranties of the Obligor. The Obligor
represents, warrants and covenants to and with the Remarketing Agent as follows:
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65
(a) All representations and warranties of the Obligor in the Bond
Purchase Agreement dated December 15, 1997, among ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co.
Incorporated, as underwriter, the Issuer and the Obligor (the "Bond Purchase
Agreement") are true and correct as though made at and as of the date hereof.
(b) The Obligor is fully empowered to enter into and perform all
agreements on its part herein contained; the Obligor has been authorized to
enter into and deliver this Agreement (by all necessary and proper legal
action); and the execution and delivery by it of this Agreement and the
performance of the agreements herein contained do not contravene or constitute a
default under any agreement, indenture, mortgage, loan agreement, commitment,
provision of its charter documents, or other existing requirements of law or
regulation or any other agreement of any kind to which it is a party or by which
it is or may be bound.
Section 7. Termination. This Agreement will terminate upon the effective
resignation or removal of the Remarketing Agent as Remarketing Agent in
accordance with Section 912 of the Indenture. The Remarketing Agent may
voluntarily resign as Remarketing Agent under this Agreement, and shall resign
as Remarketing Agent under this Agreement if requested by the Obligor in
writing, in each case upon 30 days' prior written notice. Following termination,
the provisions of Section 3 will continue in effect, and each party will pay the
other any amounts owing at the time of termination.
Section 8. Miscellaneous.
(a) This Agreement will be governed by the laws of the State of
Michigan.
(b) Notices will be given to the following addresses until a party
designates a new address in writing:
If to the Obligor:
Autocam Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn:▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chief Financial Officer
If to the Remarketing Agent:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Municipal Note Trading
(c) Nothing contained in this Agreement shall be deemed to create any
employment relationship between the parties hereto or to create any fiduciary
obligations of the Remarketing Agent to the Obligor except as expressly provided
herein.
(d) This Agreement may be amended from time to time by an instrument
in writing executed by the parties hereto.
(e) Section headings are included herein for convenience of reference
only and shall not be considered a part of this Agreement for any purpose.
(f) Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating any
other provision hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
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(g) The Remarketing Agent, in its individual capacity, may in good
faith buy, sell, own, hold or deal in any of the Bonds, including Bonds which
are remarketed, and may join in any action which any Bondholder may be entitled
to take with like effect as if it did not act in any capacity hereunder. The
Remarketing Agent, in its individual capacity, either as principal or agent, may
also engage or be interested in any financial or other transaction with the
Issuer or Obligor but it is understood and agreed that funds for the purchase of
Bonds which are remarketed shall come only from the purchasers of Bonds which
are remarketed or from the Obligor (including pursuant to any Credit Facility or
Substitute Credit Facility) and not from the Remarketing Agent.
(h) This Agreement may be executed in any number of counterparts, all
of which shall be deemed originals hereof.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & CO. INCORPORATED
"Remarketing Agent"
By:_______________________________
Its: Senior Vice President
AUTOCAM CORPORATION
"Obligor"
By:_______________________________
Its: Chief Financial Officer
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